In this episode, the vice-chancellor of James Cook University Simon Biggs and HEDx’s Martin Betts interview Lisa Brodie, the dean of an innovative new independent college in the UK, ASU London.
Please login below to view content or subscribe now.
Brazil exited the age of slavery 135 years ago. It remains a multi-racial society today. But for much of the twentieth century, Brazil suffered an enormous bout of amnesia. From being one of the last societies on earth to give up slavery, it immediately began touting itself as a place where colour did not matter, that it was a post-racial society.
But then about 30 years ago, things changed. Race — or more accurately race and inequality — became a much more prominent subject of debate, and various measures were brought in to lessen racial inequality. In higher education, however, Brazil did not however take the path of “affirmative action” as the United States did. Instead: it went the route India did with respect to caste: hard, fixed numerical quotas.
Today we’re going to look at how that this policy has worked out, and joining me to do so is Luiz Augusto Campos: He’s a professor of sociology and Political science at the State University of Rio de Janeiro, and he’s co-editor of a recent book on quotas in Brazilian higher education called O impacto das cotas: Duas decadasde acao affirmativano Ensino superior brasileiro. We had a great discussions about how Brazilian admissions quotas came to be and how they have change higher education. Of particular interest to me is that these quotas were imposed in some of the country’s most elite institutions — and how the arrival of quotas has managed to make policies of free tuition at elite institutions much less regressive.
But enough from me: over to Luiz.
The World of Higher Education Podcast
Episode 4.7 | Access and Aftermath: What Racial Quotas Changed in Brazil’s Universities with Luiz Augusto Campos
Alex Usher (AU): Luiz, before we start talking about quotas in higher education, let’s paint a picture of race in Brazil. Like the United States, Brazil was a colonial slave state—one where emancipation didn’t happen until 1888. But for a long time, there was a kind of myth that Brazil had become a post-racial society, one where people didn’t see race. So, what are the politics of race like in Brazil, and what’s changed over, say, the last 50 years?
Luiz Augusto Campos (LAC): That’s true, and I can say that almost everything has changed in recent years. At the beginning, Brazil was portrayed as a racial democracy—the idea that people in Brazil don’t see race and that there’s no racism. It’s complicated to understand how a country that was completely slave-based in the past could create this myth.
The myth was actually quite successful in the sense that most Brazilians used to believe it. It’s connected to how people viewed our history of slavery. In the past, people used to say that Brazilian slavery was a kind of soft slavery compared to other countries. Historians now show that’s not true, but that was how people saw it.
It was also tied to the myth of miscegenation—the idea that every Brazilian was of mixed race. And if everyone was mixed race, there was supposedly no place for racism, because you couldn’t practice racism against someone who was mixed, as everyone was.
But after 50 or 60 years, this national myth started to change—first because of the rise of the Black movement, which began to call out racism in Brazil, and later because of data on racial inequality. We’ve historically had very good data on race in Brazil—it’s a kind of legacy from the 18th century, through censuses and demographic records.
Those numbers began to show that, despite this idea of racial democracy, racial inequality remained deeply entrenched in Brazil, right up until the end of the 1990s. I think those two things—the activism of the Black movement and the hard data—really contributed to changing people’s belief in the myth of racial democracy.
AU: Just to be clear, when you talk about data on race, how is race classified? I don’t think it’s just white and Black, right? How does that work?
LAC: It’s changed over time, but we generally work with five racial categories. Even today, the Brazilian census is quite good. When a census worker comes to your house, they’ll ask you to identify your race using one of five options: Black, Brown, White, Yellow—which refers to Brazilians of Asian descent—and Indigenous.
That last category isn’t meant for people with distant Indigenous ancestry, but rather for those who actually live within Indigenous communities.
AU: Within higher education, how did race historically affect access? How big were the participation gaps between racial groups prior to the introduction of quotas?
LAC: The differences were huge. At the beginning of the 1990s, about 70 percent of students in public higher education were white. And it’s important to note that Brazil has both a public and a private higher education system.
AU: Right—and even though the private system is larger, the public system is the more selective and prestigious one. That’s where people want to go, correct?
LAC: Exactly. The private system is much bigger, but the public system is more selective, higher quality, and more prestigious.
At the start of the 1990s, around 70 percent of enrollments in the public system were white students. That was a real injustice, because the public system is completely tuition-free. So essentially, the government was collecting taxes from the majority of the population—who are largely Brown, Black, and poor—and using that money to fund the education of white students, who mostly came from middle- and upper-class backgrounds.
AU: Let me just ask—if about 70 percent of students in public higher education were white, how did that compare to the population as a whole?
LAC: In Brazil, the population has usually been about half white and half non-white. At the beginning of the 1990s, around 57 percent of people self-identified as white, but they made up about 70 percent of students in public universities.
It’s interesting, though, because racial classification in Brazil has also shifted over time—the proportions of people identifying as white, Black, or Brown have changed. But to answer your question directly, today less than 50 percent of students in public higher education are white. Black and Brown students now make up the majority in the public system.
AU: Let’s think about how we got there. In the 1980s and 1990s, as you said, racial politics started to change across Brazil. People realized this wasn’t really a racial democracy. How did quotas become the tool for achieving racial justice, rather than affirmative action as practiced in the United States at the time?
LAC: It’s a really complex process—and not one that was carefully planned.
First, we had the earliest proposals coming from the Black movement, mostly from an important Black leader in Brazil who was a congressman at the time. He introduced several bills for affirmative action, most of them based on quotas, though they included other ideas as well—such as direct financial support for Black Brazilians and other measures. But the core idea of quotas was already there in the early 1980s.
After that, we saw the rise of a movement creating preparatory courses for university entrance exams. In Brazil, admission to public universities is based on a standardized test, and these prep courses were designed by Black activists to help Black, Brown, and low-income students prepare for it.
The first actual quota policy began at my own university—the State University of Rio de Janeiro—at the beginning of the 2000s. Interestingly, the counselor who approved the quota system was from a right-wing party. He wasn’t necessarily a racial justice advocate; he was just a politician looking for proposals to champion, and this was one he decided to push through.
From that point onward, other universities began to adopt and replicate the model. Today, Brazil likely has the largest racial quota system in the world.
AU: So, how did we go from a situation in the 1980s and 1990s, where a few institutions were experimenting with quotas, to a point where the federal government actually mandated them for all federal universities in 2012? What led up to that decision, and how does the current quota system work?
LAC: It’s a complex story. In the beginning, there was fierce opposition to quotas in Brazil. Even intellectuals and public figures who had long supported anti-racist efforts criticized the quota system when it was first proposed.
At the same time, there were also important groups supporting these policies, but the federal government initially stayed on the sidelines. During Lula’s first two terms, he was personally supportive of such initiatives, but because the topic was so controversial, his government took a cautious approach. They said, “We need to wait—this is a divisive issue,” and chose not to sponsor a national quota bill for higher education at that stage.
However, during Lula’s broader reform of the higher education system, the government did introduce incentives for universities to adopt diversity policies. And for many institutions, quotas were simply the most practical approach—bureaucratically, they’re straightforward to implement. You just reserve a certain percentage of seats, and that’s it.
The Black movement also played a critical role. Activists developed strategies and frameworks to encourage universities to adopt quotas, and because Brazilian universities enjoy a high degree of autonomy, many were able to introduce these policies on their own.
AU: My understanding is that the quota system is actually a kind of two-level structure. The main rule is that 50 percent of students must come from public secondary schools, and then within that, there are race-based quotas that vary depending on the region—since, I assume, the racial makeup of Brazil isn’t homogenous across the country.
LAC: Exactly. First, it’s important to understand that Brazil’s quota system is primarily socioeconomic. The first criterion is that 50 percent of students admitted to public universities must come from public schools. On average, public schools in Brazil are of lower quality than private schools. You don’t pay to attend them, but the quality is generally weaker.
Within that 50 percent, there’s another socioeconomic division: 25 percent of seats are reserved for students from lower-income backgrounds, and 25 percent for students from higher-income backgrounds who still attended public schools.
Then, inside those categories, there are racial quotas. And as you said, the racial proportions vary by state, depending on the local population.
AU: It’s now been a couple of decades since quotas were first introduced, and 13 years since the federal law came into effect. You mentioned earlier that there’s been a significant narrowing of racial access gaps. How substantial has that change been?
LAC: In terms of access, it’s very significant. Today, we can say that Brazilian universities are truly Black and Brown universities. If you visit a campus in Brazil now, you’ll see far more Black and Brown students than in the past.
That said, there are still limits and challenges. While the public higher education system has changed dramatically in both racial and socioeconomic terms, it remains quite small compared to the private sector. In the 1990s, the public system made up almost half of Brazil’s entire higher education system. Today, it accounts for only about 20 percent.
AU: What about graduation rates? It’s one thing to get into university, but as you mentioned, students from public secondary schools might not have had the same preparation. Has the system been able to adjust to ensure that racial minorities are graduating at the same rate as white students?
LAC: In terms of graduation, the rates are quite similar. Black and Brown students now graduate at roughly the same rate as white students. But there are still differences because, even with quotas, access isn’t evenly distributed across all majors.
AU: So, there’s still stratification within the system.
LAC: Yes, exactly. Because racial quotas exist within the broader socioeconomic quota, the share of seats reserved for Black and Brown students ends up being about half of their proportion in the overall Brazilian population.
As a result, in some programs—especially in the less selective ones—you might see 50 or 60 percent of students identifying as Black or Brown. But in the most selective fields, like law or engineering, that number drops to around 20 percent.
It’s also important to note that not all quota seats are filled. Universities sometimes introduce additional requirements or special exams that can limit how these racial quotas are implemented in practice.
AU: Based on your overview of quotas and their results, is there anything you think could be improved in the system?
LAC: Yes, there’s quite a lot that could be improved. We have a new law from 2023 that made some small but important updates to the 2012 legislation. It’s a good law—I think it corrected several issues—but there are still many areas that need attention.
First, data access. In Brazil, getting access to racial data is actually harder today than it used to be. This is partly due to new data protection laws that were meant to regulate big tech companies, but in practice they’ve ended up restricting academic research instead. So, access to race-related data for research is now much worse than before.
Second, the admissions system itself is extremely complicated. Students take a national standardized exam—the ENEM—to apply for higher education. Through this unified system, they can choose from roughly 6,000 different programs across the country.
Within that, there are multiple overlapping quota categories. Besides the main racial and socioeconomic quotas, there are additional ones—like for students with disabilities—which exist inside the broader categories. Altogether, there are around 16 groups, and combining all of them within a single national admissions platform makes it very difficult to fill every quota properly.
So, while the policy framework is strong, the system still has a lot of complexity and operational challenges that need to be addressed.
AU: And what do you think the future holds for quotas in Brazilian higher education? Is there a limit to how far quotas can help narrow the access gap? And can you imagine a future in which quotas wouldn’t be needed anymore?
LAC: I can imagine that future—and I hope for it. I think we’re all working toward a world where quotas are no longer necessary. But for now, they’re still very much needed.
At the moment, the quota system itself isn’t under serious attack. What is under pressure, though, is public higher education—and really the higher education system as a whole. There’s a growing discourse, mostly from the far right, claiming that higher education isn’t necessary, that people should simply “work hard” instead.
Public universities, in particular, have become targets. Critics accuse them of being useless or of being dominated by the far left, which simply isn’t true.
To answer your question directly, I’d say the quota system in Brazil is quite stable right now. But the institutions that sustain it—especially public universities—are facing challenges. Looking ahead, I think the next step is to expand affirmative action beyond higher education, into other areas like the labor market and public institutions, where access for Black and Brown Brazilians remains limited.
AU: Luiz, thank you so much for being with us today.
LAC: Thank you. It’s my pleasure.
AU: And it just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our readers and listeners, for joining us. If you have any questions about today’s episode or suggestions for future ones, don’t hesitate to contact us at [email protected]. Next week is a break week—but after that, we’ll be back with another fascinating conversation. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
The economics of higher education are tricky. It’s a labour-intensive industry, and generally speaking the cost of producing labour-intensive goods will always increase faster than the price of producing capital intensive goods, because the latter have more scope for increasing productivity. That’s not a problem if you are a public institution in a country with bottomless pockets, or if you are a prestigious private institution with almost unlimited ability to raise prices. If you’re among the other 99 percent of the world’s institution, though, you have to find ways to balance rising costs with new sources of income. But every money-making scheme comes with problems…and costs! So which one to choose?
Today’s guest is Joshua Travis Brown, from Johns Hopkins University’s School of Education. He’s the author of a new book called Capitalizing on College: How Higher Education went From Mission-Driven to Margin-Obsessed, which follows the fortunes of a number of institutions who try out different strategies to try to keep themselves afloat. Some try to double-down on a historic place-based residential mission and charge higher fees; others try to find ways to generate revenue that can cross-subsidize their historic place-based activities. But what’s particularly intriguing about this book is that his subject institutions are all religious institutions. Not only does that mean no core public funding: it means that decisions about how to find new business lines all really have to pass a test of God vs. Mammon.
This really is one of the best higher education books of the year and I was so pleased we could get Josh on the show. I won’t spoil the fun any more: here’s Josh.
The World of Higher Education Podcast
Episode 4.6 | Capitalizing on College: Mission, Money, and Survival in Higher Ed with Joshua Travis Brown
Alex Usher (AU): Josh, your book is one of my favorite kinds of higher education books—lots of real, if disguised, institutional case studies. I get the impression that what you were trying to do was look at different financial strategies to cope with the phenomenon of ever-rising costs in higher education—Baumol’s disease, basically. How did you choose those eight institutions for your case studies? And why did you focus only on religious institutions, which I thought was a really intriguing choice?
Joshua Travis Brown (JTB): Thanks, Alex. That’s an excellent question to open with. I was looking around at the world, and a lot of what we in higher education base our norms on are the best practices maintained by elite institutions—those that accept only about five to nine percent of applicants. But then there’s the other ninety-one to ninety-five percent of institutions that don’t have those kinds of resources, and their world looks radically different.
One group I focused on are what we call tuition-driven institutions in the American sector. That’s actually a very diverse set of schools that, I’d argue, form the backbone of American higher education—at least in terms of its diversity. These include Hispanic-serving, minority-serving, HBCUs, predominantly Black, religious, women’s, Asian American, vocational, and regional colleges, among others.
Within that really rich and diverse group, the largest by far are the religious colleges and universities in the United States. There are roughly a thousand of them—Protestant, Catholic, some Buddhist, Mormon, Muslim, and Jewish institutions as well. I chose to sample primarily from the Protestant group. And the reason for that choice is that I was interested in behavior, not belief.
The perspective I argue is most valuable is one that looks at behavior that cuts across institutional types, rather than staying within silos and making what I’d call an erroneous assumption that, “This sector operates this way, and that sector operates that way.” I argue instead that everyone is in competition with one another—and to truly understand the sector, you have to look at behavior across all types.
AU: Based on your work at these institutions, you developed a four-part typology with four types of institutions. You call them those following a Traditional Strategy, a Pioneer Strategy, a Network Strategy, and an Accelerated Strategy. How did you come up with those four? Were they in the back of your mind when you selected the cases, or did they emerge organically from the research?
JTB: This is purely grounded theory—straight from the data. What I’m arguing here is that I’m looking within what I call the “missing middle.”
A lot of higher education research tends to focus on what I call the bookends—students on one end, and government or the state on the other. But we don’t do a great job, as researchers, of really diving in to hear the voices of those actually running and leading the institutions.
So as I started to look at the data, pull out themes, and group them into buckets, these four strategies emerged. There was even a fifth one beginning to appear, which I called Accelerated Networks—where the accelerated institution was trying to crack the code to move to the next level of market-oriented behavior. So yes, they surfaced organically from the research.
AU: Let’s talk about that Traditional Strategy. What does it entail? What kind of resources does it take to implement? And how easy is it to, you know, for lack of a better word, win using this strategy?
JTB: The Traditional Strategy is your typical higher education institution that values prestige. They’re constantly looking to the elites.
There’s a whole sector of “little Ivys,” “public Ivys,” and “mini Ivys” that sit just below the Ivy League institutions, and they’re really trying to leap forward into that group. These institutions not only value prestige, but they also operate under the assumption of an in-person education. As one president told me, “You come to a tradition.” He repeated that phrase several times. These institutions rely heavily on building their brand, climbing the rankings, ensuring their athletics are top-notch, and gaining national exposure through sports. They want to become household names.
The problem for traditional institutions—and really, for all institutions—is that the residential, on-campus, in-person model of higher education in the United States operates at a deficit. It must be subsidized.
For the traditional institutions, that subsidy comes primarily from endowments—the spinoff revenue that supports the residential model. And the key takeaway from the book, across all these strategies, is that everyone is trying to subsidize the residential core. What differs is how they do it.
The traditional model depends on philanthropists, wealthy donors, and the prestige that fills their sails. They can call on endowments of two, three, four, five, six, even eight hundred million dollars—and the revenues those spin off—to make their operations sustainable. Or at least, so they think.
AU: Tell us about the second strategy then. You’ve got a Pioneer Strategy. What does that mean—and where do those subsidies come from, if we can put it that way?
JTB: From this point forward in the book, everything turns entrepreneurial. These institutions no longer look to endowments—because they don’t have them. So, for the next six schools in the book, every president is basically saying, “I don’t have an endowment. I need to find margins—and I need to find them somewhere.”
And what they do is turn to students. That’s where they find their margins.
In the Traditional Strategy, as I mentioned earlier, the assumption was that you come to the institution for the tradition—to receive it, to be inculcated into it. The Pioneer Strategy turns that idea on its head. These institutions ask, what if we took the classroom to the students?
That’s the innovation here. Every one of the next strategies has some kind of innovation at its core. In many ways, this book is a story—or a playbook—of innovation. That’s what I hope readers take away: not just the strategies, but the innovative practices themselves.
So, these institutions took classrooms to hotels. They took classrooms to schools and high schools, to shopping malls, to military bases. They went to where the customer was. The classroom became reconceived—portable. And they picked a type.
I take readers through three different types in that chapter, and then show how they replicate it. Whatever region they’re in, what you end up seeing is a giant branch campus model built around that one specific type.
You’ve got multiple sites, but all following the same formula. And all of the revenue—say, a 20% profit margin—from those branch campuses flows back to the core institution. That’s how they rebuild the core.
Over the course of a decade, they can raise anywhere from two hundred to five hundred million dollars—and they use that money to physically transform and rebuild the residential campus.
AU: But all those markets you’re talking about—it’s really just mature students, right? Are there other pioneer markets you can go to besides mature students?
JTB: The principle here is that these institutions were first movers. They were the first movers in adult education at the time.
For readers today—if I’m a leader picking up this book and asking, “What’s the takeaway here?”—I’d say: think badgification, think microcredentials. Think of some new market that’s just about to spin off or is moments away from being spun off.
Anyone who goes all in on that kind of emerging market would be a pioneer institution. They’d be adopting the Pioneer Strategy for that new market—just as these institutions did about a decade ago.
AU: Does it work? I mean, it takes money to make money, right? You’ve got to rent the hotel rooms, pay the professor to go there and teach. It sounds like you have to be extremely margin-conscious—and at a certain point, it’s easy to overshoot, to overcommit to these kinds of things. So how many of the institutions you looked at actually managed to reinforce the residential core?
JTB: They did—but by the time I arrived on campus, the folks in the Traditional bucket were saying, “Oh my gosh, we need a new strategy.”
Meanwhile, the folks at the Pioneer institutions were saying, “Hey, this has worked for about five to seven years, but the competition is so intense it’s eating into our margins. Other institutions are moving into our space. It’s getting really hard to recruit. We need to add a new market.”
And that’s the principle behind the Network Strategy. Rather than having one type, they add multiple types. That’s the big difference between the two: the Pioneer Strategy has one type with multiple sites, while the Network Strategy has multiple types, multiple sites—and it’s global.
AU: Let’s talk now about that Network Strategy. Just as you were finishing there, I think you were saying the difference between the Pioneer and Network strategies is how many new markets you go after. Is it more than that, or is that really the key distinction between the two?
JTB: No, that’s the big difference—because again, what we’re really trying to figure out here is: how are you subsidizing your residential model? It never makes enough money on its own. So where are you finding those margins? And those margins always come from the periphery.
For the Network Strategy, one of the presidents I interviewed described what he called his tabletop strategy for running the institution. He said, “The residential core is the tabletop. All of my peripheral markets—whether online, international, transfer, or adult education—those are the legs. And I’m constantly looking for new legs, new sources of revenue, to support this tabletop.” He went on to say that the tabletop—the residential core—is what gives legitimacy to the entire model. You can’t do this without the tabletop.
And that’s the key difference between the Network Strategy and something like the University of Phoenix. Phoenix was essentially one giant leg. What they lacked—and what people criticized them for—was legitimacy. They didn’t look like a traditional college, and they weren’t serving typical students.
That’s why this book and this perspective are so valuable: when nonprofit institutions start going after the same students or adopting some of the same practices as for-profit institutions like Phoenix, the lines begin to blur. To really understand what’s happening, you have to look across types and sectors—and focus strategically on the behavior itself.
AU: Is that an easier strategy to pull off than the Pioneer one? I mean, it sounds harder to me—but it might also have bigger rewards, since it spreads the risk across different types of markets.
JTB: That’s absolutely key, Alex. One of the presidents I interviewed put it exactly that way. He said, “I’m trying to build a stock portfolio of enrollment. If one sector goes down, I still have another three or four sectors over here, so a drop in one leg isn’t going to sink the ship.” What they were striving for was balance. But both institutions, in their enthusiasm for adding new legs, made a critical mistake—they actually ended up creating a second tabletop.
They either absorbed another institution or built a massive campus overseas—in one case, in Asia. And instead of funneling all of their margins back to the residential core, they had to start directing them to these peripheries, to that second tabletop.
It became really complex. Morale declined. And by the time I arrived on campus, they were looking for a new kind of market—something they could take to scale. And that’s what the next school managed to crack.
AU: Let’s talk about that last strategy—the one you call the Accelerated Strategy. It’s an amazing case study, especially because it’s a religious institution. As you put it, it’s where God and Mammon really start to duke it out.
This is an institution that seems to have crossed the line from being merely margin-conscious to acting like a full-on for-profit college. And that’s wild for a faith-based organization. Tell us about this institution—and how going down this route changes a university.
JTB: You know, what’s crazy is that I changed all the names of the actual schools in the book—but when a school named its competitors, I left those in.
So as I’m interviewing the leaders at the accelerated institution, they’re saying, “Hey, we’re like ASU. We’re like Penn State. We’re like the Maryland system. We’re like Western Governors, UCF, Florida, Southern New Hampshire University.” And they viewed that entire group of schools as their competitors. The way they took their model to scale was through process and product innovation.
I was sitting across from the provost, and he told me, “I had a vision. I pictured an old country store. Down one side of the store was one product, and down the other side was another product—and that’s all we had to sell.” Those two products were an MBA and an interdisciplinary studies degree. At that time, if you wanted to earn a degree online from this institution, those were your only two options. But then he had this transformative idea. Over the course of a single summer, he took roughly 35 to 80 residential courses and converted them for online delivery. Within three to six months, that old store suddenly had 35 different products on the shelves.
And here’s the key innovation: everyone else at the time was selling online classes. This institution became one of the first—outside of Phoenix—to sell online degrees. They fundamentally shifted the product, and that move blew up their market. Virtually overnight, they went from 8% to 42% growth.
AU: Wow. But surely it changed the culture of the campus?
JTB: It did. People talked about the tension between the residential and online sides of the institution. The student population ballooned so dramatically that it went from being majority residential to, essentially, for every ten online students, there was one residential student. It radically transformed the institution. They were able to hold costs flat.
Now, the other entrepreneurial schools I studied were funneling their margins back into overhauling the residential campus. That’s what I call margin capitalization. Instead of looking for donors or venture capitalists, they turned to students.
This particular school made so much money—just north of two hundred million dollars a year—that they were not only able to completely rebuild their campus, but also to put hundreds of millions into their endowment.
What this institution effectively invented is a new form of philanthropy that I call margin philanthropy. Instead of relying on alumni—graduates who go out into the world and eventually give back—you’re leveraging the loans of students who are currently enrolled. They become your new philanthropists.
The risk of construction and the growth of the endowment aren’t borne by the institution anymore; they’re borne by the students themselves—who walk away with a degree in one hand and a student loan, anywhere from fifty to a hundred thousand dollars, in the other.
AU: The problem of ever-rising costs—Baumol’s disease, basically—is one that plagues every educational institution. Only by spending more money every year can you hope to stay in place. But achieving that means raising more money every year.
And I read your book as being fairly pessimistic about any institution’s ability to sustain that in the long run. Right? You can have all the strategies you want to increase revenue, but they all require hiring more staff, becoming more complicated—and then Baumol just reappears further down the line. Is that a fair summation? Do you think one of these strategies is actually more promising than the others? Or does Baumol’s law come for all of us eventually, no matter what?
JTB: I think one of the big takeaways from the book is that this sector is constantly marching upward in its market behavior.
When I arrived on these campuses, everyone was saying, “We’ve got to sustain. We need more. We need more revenue. We need more margins.”
Now, while Baumol, as an economist, has one way of looking at the world, I don’t think it’s entirely accurate. He was, after all, an economist from several generations ago. What’s spun out of economics since then is the field of strategy and management, which focuses more on the agency of actors within organizations.
Those working in strategy and management began to explore that agency—to explain the world in a more nuanced way. And that’s where this book differs from Baumol’s framework: it’s grounded in organizational theory, strategy, and management.
What you end up seeing—and what the book focuses on—is this: we often hear about public policies, particularly from the Federal Reserve in the U.S., that are based on the idea that if you increase competition and give students choice, the natural outcome will be higher quality. As institutions compete, quality should improve—at least in theory.
But what this book shows is that when you incentivize students to be more self-interested and to make market-based choices, you also incentivize institutions to be more self-interested.
That’s why we see institutions going after student loans and seeking margins from students—they’re also operating in a highly competitive market.
So, what this book illustrates are the trade-offs between mission and money that college leaders are forced to make when we choose to design a national education system based on market principles of competition. And that, I’d contend, is a challenge much bigger than Baumol himself.
AU: You’ve focused obviously on one group, the non–research-intensive private institutions, and a particular sub-sector within that. How much can you generalize from this book to other types of institutions—secular ones or public ones?
JTB: That’s a great question. The reason I narrowed the focus so tightly is that, in case studies, what you want to do is control for noise. So rather than mixing all types of tuition-driven institutions together, I chose one type and looked at the behavior across those cases.
But I would contend that because I’m really examining a single phenomenon—tuition—and specifically two questions: how do students get their money, and what do institutions do with it?—this framework is broadly applicable. And honestly, in the last six months especially, I think everyone is becoming tuition-driven.
We’re seeing decreases in research funding revenues, decreases in endowment revenues because of higher taxes. This morning’s headline from the Secretary of Commerce said they want to go after 50% of all patent revenue. And just yesterday, it was announced that all MSI funding would be decreased. The only stable thing left is tuition revenue.
What Capitalizing on College offers is a roadmap for how these institutions managed to survive in a highly competitive environment—and now everyone is entering that same space. So yes, I believe it’s highly generalizable, because this is the roadmap forward. This is the environment we’re heading into.
AU: Joshua Travis Brown, thank you so much for joining us today.
JTB: Thanks. A pleasure being here.
AU: And that just leaves me to thank our excellent producers, Sam Pufek and Tiffany MacLennan—and of course, you, our listeners and readers, for joining us.
If you have any comments or questions about today’s podcast, or suggestions for future episodes, please don’t hesitate to get in touch at [email protected].
Join us next week when our guest will be Luiz Augusto Campos, professor of sociology and political science at the Instituto de Estudos Sociais e Políticos at the State University of Rio de Janeiro. He’s the co-author of a new book on the effects of racial quotas in Brazilian universities. Join us next week. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
One of the consequences of Vladimir Putin’s invasion of Ukraine has been a vast reconfiguring of Russia’s academic and intellectual life. Universities, thought of as a potential hotbed of opposition since the White Ribbon movement of 2011, came under intense control and its personnel placed under even greater scrutiny.
Many faculty fled. Connections with international partners in the West were severed. And then to top it off, the Russian government announced that it would abandon the three degree bachelor’s, master’s doctoral system introduced when the country joined the Bologna Process 20 years earlier.
All this has combined to create what some have called a slow motion collapse in Russian higher education. But to understand what’s been happening in Russian Universities since February 2022, you really need to go back to the dawn of the Putin era in January 2000, and understand how ideological control of institutions has come to rest squarely inside the Kremlin.
Joining the podcast today is Dmitry Dubrovsky. He’s a scholar at the Institute for International Studies at Charles University in Prague, where he has taught ever since being designated as a foreign agent by the Putin regime in early 2022. And he writes primarily about the politics of academic freedom and civil society in Russia.
He’s with us today to talk about this slow motion collapse, the internal governance of Russian institutions, and how the country might one day be put back on a track to integration with European academia. Over to Dmitry.
The World of Higher Education Podcast
Episode 4.5 | Undoing Bologna: Russia’s Conservative Turn in Higher Education with Dmitry Dubrovsky
Alex Usher (AU): Dmitry, I want to take us back to the year 2000. Vladimir Putin is the new president of the Russian Federation. What was the state of the higher education sector at the time, and how did Putin approach it? How did he view higher education as an instrument of state policy?
Dmitry Dubrovsky (DD): Well, the legacy of the 1990s left Putin with a serious challenge. The system faced underfunding and fragmentation. At the same time, scholars were eager to join the European system. There had been attempts in the 1990s, but the biggest problems were the lack of financing and the absence of international mechanisms or tools to fully integrate into the European system of higher education and science.
Putin saw higher education and science, first and foremost, as a tool to join Europe—to become part of the European family and a prominent member of the global market of ideas. That’s why Russia joined the Bologna Process in 2003 and actively pushed for internationalization.
AU: So in that sense, it’s probably not that different from most other countries in the former socialist bloc, like Poland or Romania—the idea that internationalization would bring about an improvement in higher education. Is that about right?
DD: It is right, with one very important difference. At first it might seem small, but it became a very serious issue. In higher education and science, everywhere in the world, there are always people who believe that their own system is highly advanced—at the very top.
The problem in the late Soviet Union and the Russian Federation was that a substantial number of people survived the collapse of the USSR still believing that Russian and Soviet science was the most advanced in the world. In some cases, for certain disciplines, that might have been true. But in most areas—especially the humanities and social sciences—it wasn’t.
By the late 1990s, there was a substantial group of people who were deeply disappointed in the results of democratic reforms and in what democracy had brought, both to the country overall and to higher education and science in particular.
AU: Okay, now, Putin was president until 2008, and then he switched places for four years with Prime Minister Medvedev. He returns to power as president in 2012. And as you say, it’s a different Putin—a much more authoritarian Putin. How did his approach to higher education change? If we think of “Putin 1.0” around 2000, what does “Putin 2.0” look like after 2012? How does he try to exert greater control over the system?
DD: It’s important to note that before Putin came back to power, there was a very significant period of reform in Russian higher education. Especially around 2007–2008, reforms were focused on improving quality and gaining international recognition. This was the era of what we call “managerialist modernization.”
The idea was to select flagship universities that would drive the rest of the system forward into a brighter future.
AU: And eventually that becomes the 5–100 Project.
DD: Yes, the 5–100, or “5–2020” project. The goal was that at least five Russian universities should appear in the world rankings. It was a very interesting period because it marked a serious transformation in the sociocultural landscape of Russian higher education.
For the first time, the so-called “effective managers” entered the system. From the mid-2000s onward, higher education began receiving serious investment from the state, making it appealing to a new managerial class and their approaches. Internationalization advanced, but it went hand in hand with growing managerial control over universities.
Even before Putin returned in 2012, higher education was already being used as a tool to demonstrate the effectiveness of Russian policy and as an instrument of soft power, particularly through supporting Russian universities in former Soviet countries like Armenia, Azerbaijan, and Tajikistan.
When Putin came back, however, the situation changed dramatically. What I call the “conservative shift” began—not just in politics broadly, but within higher education and science.
AU: And some of that has to do with the broader crackdown at the time. I remember there was a lot of pressure on foreign organizations, which made international cooperation more difficult. For example, the government targeted the Open Society Foundations, George Soros’ network that had been active in supporting the social sciences and humanities. There was also a crackdown on things like gender studies and spaces for LGBTQ students.
Masha Gessen wrote about this in her book The Future is History. Why did that happen at that moment? What was it about Putin that made him say, “This is an area I want to control and push in a more conservative direction”?
DD: First and foremost, we have to remember the protests of 2011–2012. That was the time of the so-called “white ribbon” movement. It came very close to a revolution, though in the end it never happened—we failed. I was a member of that movement myself.
The significant participation of scholars and students in those protests put higher education under special scrutiny from the security services and the political apparatus. They believed that control over the education system could restore their legitimacy and symbolic power in society.
And remember, these leaders were, in many ways, Soviet people. They genuinely believed, “This is how the Soviet Union ruled—through control, especially in education and ideology.” And to some extent, that was true. The Soviet Union consolidated its power in part through universities.
Putin believed the same could work for him—that restoring control over higher education would allow him to strengthen his government, which had been undermined by the events of 2011–2012.
AU: We’ve been talking about the relationship between institutions and the government, but the government also changed the way institutions were run a couple of times, right? How has the exercise of power within Russian universities changed? I’m pretty sure there’s been a change in the process of selecting university leaders. How has that affected Putin’s ability to control universities?
DD: The specificity of Russian universities in the 1990s was that there was an enormous amount of democracy. There was absolutely no money in the system, so it was extremely poor—but at the same time, it was a kind of “poor democracy.” There were numerous elections, and the whole system of university governance was very active in self-governance.
There were real political struggles. People fought for the position of dean, they competed for the position of rector. Even department chairs could be elected. Almost every administrative position within a Russian university could be filled through an election.
When Putin consolidated power, especially during the managerial reforms, there was pressure—particularly on the flagship universities in the 5–100 Project—to amend their charters and replace elections with government appointments.
The official explanation was simple: if the state was providing so much budget support, then the state should also assign the rector rather than leave it to an election.
Even now, some Russian rectors are still technically elected. But in Putin’s Russia, an “election” is not an election in the normal sense. The ministry proposes the candidate, people watch the process, and it ends up looking very much like the way Putin himself is “elected.”
AU: Dmitry, in the early days of the 2022 invasion of Ukraine, one thing that surprised a lot of people in the West—it seemed to come out of the blue—was a letter in support of the invasion signed by several hundred university rectors. Why did they do that? I mean, presumably they were ordered to by Putin, but why did Putin think that would be legitimizing?
DD: In post-Soviet societies there is a very high level of trust in higher education and science. The leaders of higher education were expected to officially support the so-called “hard decision” about the war.
But it’s important to remember—something some of our colleagues abroad seem to forget—that most of these rectors were never democratically chosen. They do not represent the voices of Russian scholars, lecturers, or faculty members. They mostly represent the vision of the presidential administration. Their role was to collect names for a list of support and then sign this shameful document.
And of course, this didn’t start in 2022. Under the “foreign agent” law of 2015, the government began a long anti-Western campaign—searching for “un-American” groups of influence, cutting connections with international centers, and declaring institutions like Central European University or Bard College in New York to be “undesirable organizations.”
This created a climate of fear and anxiety among the leaders of higher education. And there was direct blackmail: if you decided not to sign, that was your choice—but you had to think about your faculty, your team, your colleagues. They would probably be fired soon.
AU: What changed on university campuses after the invasion? Obviously, if I were in Putin’s position, I’d be worried about student unrest. So what happened in terms of surveillance on campus, and how did faculty react? I mean, you were a faculty member at the time, and you’re one of many who left fairly quickly after the invasion. How big a brain drain was there?
DD: Not as big as you might think, for different reasons. Academics can’t move as easily as other people—they need to be sure they’ll have a way to continue working, and for many there simply wasn’t anywhere to settle quickly.
My personal story was different. By coincidence, I had an invitation for a fellowship. Long story short, I relocated quickly from my home city of St. Petersburg to Prague. But for many others, leaving was far more difficult.
As for institutional surveillance—yes, it was there. It looks like Russia had been preparing for war for about two years beforehand. Around two years before the invasion, they started introducing special vice rectors responsible for “youth” whose actual role was to monitor and control loyalty.
At the same time, they established special departments within Russian universities with very long titles—things like “Promoting Civic Consciousness, Preventing Extremism, and Managing Interethnic Relations.” In practice, these were institutions embedded in higher education to control and discipline students and scholars.
Their real work was searching social networks, looking for so-called “betrayal” behaviors among students and faculty, and reporting them to the security services and police. Today, almost every region of the Russian Federation has one of these departments to oversee and report on improper behavior.
AU: After that rectors’ letter, Russia was suspended from the Bologna Process, and in retaliation Putin announced a return to the pre-Bologna system. So, getting rid of the bachelor’s, master’s, PhD framework and bringing back the old Russian model with the second PhD. How is this process unfolding? How easy is it to undo Bologna?
DD: That’s a good question. I don’t think Russia is really going to undo Bologna. They’re not planning a full reversal or trying to recreate the Soviet path.
From one side, there’s direct pressure on the Ministry of Higher Education and its bureaucrats to dramatically change a system that has been built over twenty years. But this system cannot simply be reversed. Legally, if students have already been admitted to a particular program, the state can’t just stop it midstream. At the very least, it would take four or five years to change. It can’t happen overnight.
Secondly, to me this feels like an exercise in mimicry or emulation from the old Soviet-style bureaucratic circles in higher education. I follow what’s happening closely—the statements from the Minister of Education—and they always try to explain what will be different, but they can’t. They have no clear idea what they’re trying to create.
Officially, they say, “This is not Bologna anymore. It has proved to be ineffective. Now we will collect the best achievements of the Russian system of education.” But what does that even mean? It’s absolutely impossible to understand. From my perspective, they are trying more to sabotage the process than to implement something substantial.
AU: Looking ahead, what do you think a post-Putin higher education system in Russia might look like? Is there a path back into the European higher education space, and what would it take to undo the damage that’s been done since 2012?
DD: That’s a good question. Currently, I would describe the situation as a “fourth deglobalization.” We’ve essentially gone back to the conditions of 2003, before joining the Bologna Process.
That doesn’t mean there’s no capacity—many faculty members still working in Russia earned their degrees in Western institutions. There is still substantial expertise within the system. But the fate of Russian higher education is very difficult to predict because it is so closely tied to the political fate of the Russian Federation itself.
If sanctions were to decrease and the war were to end, perhaps things could return to something like “normalcy.” But even that is debatable—what would “normalcy” mean in this context? At best, it might look like the Cold War era, perhaps similar to the late 1970s.
There are already serious restrictions in place: academic sanctions, boycotts, and bans on cooperation imposed by many institutions and countries. These severely limit Russia’s ability to develop visible academic exchanges with Europe. Instead, Russia is turning elsewhere—towards an “alternative globalization,” aligning more closely with countries like China, Iran, South Africa, and Brazil within the BRICS framework, [a political and economic bloc of major emerging economies that positions itself as an alternative to Western-led alliances].
AU: Dmitry, thank you so much for being with us today. It just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our listeners, for joining us. If you have any questions or comments on this week’s episode, or suggestions for future ones, please don’t hesitate to get in touch at [email protected].
Join us next week when our guest will be Joshua Travis Brown from Johns Hopkins University’s School of Education. He’ll be joining us to talk about his fascinating new book from Oxford University Press, Capitalizing on College: How Higher Education Went from Mission-Driven to Margin Obsessed. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
One of the great promises of higher education is that it acts as a social ladder—one that allows students from low-income backgrounds to climb up and reach a higher social and economic status. No one, I think, ever believed it was a guaranteed social leveler, or that children from wealthier families didn’t have an easier time succeeding after college because of their own, and their family’s, social and cultural capital. But most people, in America at least, believed that on the whole it played a positive role in increasing social mobility.
Over the past couple of decades, though, particularly as student debt has increased, people have begun to wonder if this story about social mobility through college is actually true. That’s a hard question to answer definitively. Data sets that track both student origins and outcomes are few and far between, and it’s also difficult to work out what social mobility used to look like in a quantifiable sense.
However, this summer economist Sarah Quincy of Vanderbilt University and Zach Bleemer of Princeton University released a paper called Changes in the College Mobility Pipeline Since 1900. This paper overcame some of those data limitations and took a long, more than century-long, look at the relationship between social mobility and college attendance.
What they found was sobering. Not only is higher education no longer helping poor students catch up with wealthier ones, but in fact the sector’s role as a social elevator actually stopped working almost 80 years ago. This seemed like a perfect story for the podcast, and so we invited Zach Bleemer—who you may remember from an episode on race-conscious admissions about two years ago—to join us to discuss it.
This discussion ranges from the methodological to the expositional. Where does the data come from? What does the data really mean? And are there alternative explanations for the paper’s surprising findings? But enough from me—let’s hear from Zach.
The World of Higher Education Podcast
Episode 4.4 | The Widening Gap: Income, College, and Opportunity with Zachary Bleemer
Alex Usher (AU): Zach, you wrote, with Sarah Quincy, a paper called Changes in the College Mobility Pipeline Since 1900, which looks a long way back. And you argue that the relative premium received by lower-income Americans from higher education has fallen by half since 1960. Take us through what you found—give us the 90-second elevator pitch.
Zachary Bleemer (ZB): Consider kids who were born in 1900 and were choosing whether or not to go to college in the late 1910s and early 1920s. What we were interested in was that choice, and in particular, following people for the next 20 years after they made it. Some people graduated high school but didn’t go to college, while others graduated high school and chose to go.
We wanted to compare the differences in early 1930s wages between those two groups—both for kids from lower-income backgrounds and kids from upper-income backgrounds. Now, you might be surprised to learn that there were lower-income kids going to college in the U.S. in the early 1920s, but there were. About 5 to 10% of people from the bottom parental income tercile even then were attending college.
What we found, when we linked together historical U.S. census records and followed kids forward, is that whether you were low-income or high-income, if you went to college your wages went up a lot. And the degree to which your wages went up was independent of whether you were low-income or high-income—everyone benefited similarly from going to college.
If you compare that to kids born in the 1980s, who were choosing to go to college in the late 1990s and early 2000s, you see a very different story. Everyone still gains from going to college, but kids from rich backgrounds gain a lot more—more than twice as much as kids from poor backgrounds. And that’s despite the fact they’re making the same choice. They’re going to different universities and studying different things, but when it comes down to the 18-year-old making a decision, those from poor families are just getting less from American higher education now than they did in the past—or compared to kids from rich backgrounds.
AU: I want to make sure I understand this, because it’s a crucial part of your argument. When you talk about relative premiums—premium compared to what, and relative compared to what?
ZB: What we always have in mind is the value of college for rich kids, and then asking: how much of that value do poor kids get too? In the early 20th century, and as late as the 1960s, those values were very similar. Lower-income kids were getting somewhere between 80 and 100% of the value of going to college as higher-income kids.
AU: And by “value,” you mean…
ZB: That just means how much your wages go up. So, the wage bump for lower-income kids was very similar to that of higher-income kids. Today, though, it’s more like half—or even a little less than half—of the economic value of college-going that lower-income kids receive compared to higher-income kids.
AU: So in effect, higher education is acting as an engine of greater inequality. That’s what you’re saying?
ZB: I guess it’s worth saying that lower-income kids who go to college are still getting ahead. But it’s not as much of a pipeline as it used to be. Higher education used to accelerate lower-income kids—not to the same level of income as their higher-income peers; they were never going to catch up—but at least they got the same bump, just from a lower starting point.
AU: So the gap widens now. But how do you make a claim like that over 120 years? I mean, I sometimes have a hard time getting data for just one year. How do you track college premiums across a period of 120 years? How sound is the empirical basis for this? You mentioned something about linking data to census records, which obviously go back quite a way. So tell us how you constructed the data for this.
ZB: The first-order answer is that I called up and worked with an economic historian who had much more experience with historical data than I did. Like you said, it’s hard in any period to get high-quality data that links students in high school—especially with information on their parental income—to wage outcomes 10 or 15 years later.
What we did was scan around for any academic or government group over the last 120 years that had conducted a retrospective or longitudinal survey—where you either follow kids for a while, or you find a bunch of 30-year-olds and ask them questions about their childhood. We combined all of these surveys into a comprehensive database.
In the early 20th century, that meant linking kids in the 1920 census, when they were still living with their parents, to the same kids in the 1940 census, when they were in their early thirties and working in the labor market. That link has been well established by economic historians and used in a large series of papers.
By the middle of the 20th century, sociologists were conducting very large-scale longitudinal surveys. The biggest of these was called Project Talent, put together by the American Institutes for Research in 1961. They randomly sampled over 400,000 American high school students, collected a ton of information, and then re-surveyed them between 1971 and 1974 to ask what had happened in their lives.
In more recent years, there’s been a large set of governmental surveys, primarily conducted by the Departments of Labor and Education. Some of these will be familiar to education researchers—like the National Longitudinal Survey of Youth (NLSY). Others are less well known, but there are lots of them. All we did was combine them all together.
AU: I noticed in one of the appendices you’ve got about nine or ten big surveys from across this period. I guess one methodological limitation is that they don’t all follow respondents for the same amount of time, and you’d also be limited to questions where the surveys provided relatively similar answers. You never get your dream data, but those would be the big limitations—you’ve got to look for the similarities, and that restricts you.
ZB: I’d add another restriction. You’re right that, as we filtered down which datasets we could use, the key variables we needed were: parental income when the student was in high school, level of education by age 30, and how much money they made at some point between ages 30 and 35. All of our surveys had those variables.
We also looked for information about what college they attended and what their college major was. Ideally, the surveys also included some kind of high school test—like the SAT or an IQ test—so we could see what kinds of students from what academic backgrounds were going to college.
But there was another key limitation. In most of the data before 1950, it was really difficult to get a direct measure of parental income. Instead, we usually had proxies like parental occupation, industry, or level of education—variables that are highly predictive of income, but not income itself.
So, a lot of the work of the paper was lining up these measures of varying quality from different surveys to make sure the results we report aren’t just noise from mismeasurement, but instead reflect real changes on the ground in American higher education.
AU: So you ran the data and noticed there was a sharp inflection point—or maybe not sharp, but certainly things started to get worse after 1960. When you first saw that, what were your hypotheses? At that point, you’ve got to start looking at whatever variables you can to explain it. What did you think the answer was, and what did you think the confounding variables might be?
ZB: My expectation was that two things would primarily explain the change. My background is in studying undergraduate admissions, so I thought the first explanation would be rising meritocracy in admissions. That might have made it harder for lower-income and lower-testing kids to get access to high-quality education. I also thought changes in affirmative action and in access to selective schools for kids from different backgrounds, along with rising tuition that made it harder for lower-income kids to afford those schools, could have played a big role. That was one possible story.
The second possible story is that it had nothing to do with the causal effect of college at all. Instead, maybe the poor kids who go to college today aren’t as academically strong as they were in the past. Perhaps in the past only the brilliant poor kids went to college, while all the rich kids went regardless of ability. So it could have looked like poor kids were getting a big benefit from college, when in fact those few who made it would have done well anyway.
It turns out neither of these explanations is the primary driver of rising regressivity. On the test score story, it’s always been the case that rich kids who go to college have relatively higher test scores than rich kids who just graduate high school—and that poor kids who go to college have relatively lower scores compared to their peers. That hasn’t changed since 1960.
And on the access story, it’s always been the case that rich kids dominate the schools we now think of as “good”—the fancy private universities and the flagship public universities. But over the last 50 years, poor kids have actually slightly increased their representation at those schools, not the other way around. Rising meritocracy hasn’t pushed poor kids out. If anything, the variety of admissions programs universities have implemented to boost enrollment among racial minority and lower-income students has relatively increased their numbers compared to 1950 or 1960.
AU: You were just making the case that this isn’t about compositional change in where poor students went. I heard you say there are more lower-income students at Harvard, Yale, and MIT than there were 50 or 60 years ago—and I have no doubt that’s true. But as a percentage of all poor students, surely that’s not true. The vast wave of lower-income students, often from minority backgrounds, are ending up in community colleges or non-flagship publics. Surely that has to be part of the story.
ZB: Yes. It turns out there are three primary trends that explain this rising collegiate regressivity, and you just hit on two of them.
The first is exactly your point: lower-income students primarily go to satellite public universities, basically all the non–R1 publics. Higher-income students, if they attend a public university, tend to go to the flagship, research-oriented universities.
I’ll skip talking about Harvard, Yale, and Princeton—almost no one goes to those schools, and they’re irrelevant to the overall landscape.
AU: Because they’re such a small piece of the pie, right?
ZB: Exactly. Fewer than 1% of students attend an Ivy Plus school. They don’t matter when we’re talking about American higher education as a whole. The flagships, though, matter a lot. About a third of all four-year college students go to a research-oriented flagship public university.
What’s happened since 1960 isn’t that poor kids lost access to those schools—it’s that they never really had access in the first place. Meanwhile, those schools have gotten much better over time. If you look at simple measures of university quality—student-to-faculty ratios, instructional expenditures per student, graduation rates—or even our own wage “value-added” measures (the degree to which each university boosts students’ wages), the gap between flagship and non-flagship publics has widened dramatically since the 1960s.
The flagships have pulled away. They’ve gotten more money—both from higher tuition and from huge federal subsidies, in part for research—and they’ve used that money to provide much more value to the students who attend. And those students tend to be higher income.
The second trend is what you mentioned: increasing diversion to community colleges. Interestingly, before 1980, community colleges were already well established in the U.S. and enrolled only slightly more lower-income than higher-income students. They actually enrolled a lot of high-income students, and the gap was small. Since the 1980s, though, that gap has grown substantially. There’s been a huge diversion of lower-income students toward community colleges—and those schools just provide lower-value education to the students who enroll.
AU: At some level this is a sorting story, right? You see that in discussions about American economic geography—that people sort themselves into certain areas. Is that what you’re saying is happening here too?
ZB: It’s not about sorting inside the four-year sector. It’s about sorting between the two- and four-year sectors. And on top of that, we think there’s fundamentally a story about American state governments choosing to invest much more heavily in their flagship publics—turning them into gem schools, amazing schools—while leaving the other universities in their states behind. Those flagships enroll far more higher-income than lower-income students.
AU: When I was reading this paper, one thing that struck me was how hard it is to read about American higher education without also reading something about race. The last time you were on, we were talking about SCOTUS and the Fair Harvard decision. But as far as I can tell, this paper doesn’t talk about race. I assume that goes back to our earlier discussion about data limitations—that race just wasn’t captured at some point. What’s the story there?
ZB: No—we observe race throughout this entire period. In fact, you could basically rewrite our study and ask: how has the relative value of college for white kids compared to Black kids changed over the last hundred years? I suspect you’d see very similar patterns.
The datasets we’re working with observe both parental income and race, but they aren’t large enough to separately analyze, for example, just white students and then compare lower- and higher-income groups over time. There’s a sense in which you could tell our story in terms of race, or you could tell it in terms of class—and both would be right. At a first-order level, both are happening. And within racial groups, the evidence we’ve been able to collect suggests that class gaps have substantially widened over time.
Similarly, we show some evidence that even within the lower-income group there are substantial gaps between white and Black students. So in part, I saw this as an interesting complement to the work I’d already done on race. It points out that while race is part of the story, you can also reframe the entire conversation in terms of America’s higher education system leaving lower-income students behind—irrespective of race.
AU: Right, because it strikes me that 1960 is only six years after Brown v. Board of Education. By the early to mid-1960s, you’d start to see a bigger push of Black students entering higher education, becoming a larger share of the lower-income sector. And a few years later, the same thing with Latino students.
Suddenly lower-income students are not only starting from further behind, but also increasingly made up of groups who, irrespective of education, face discrimination in the labor market. Wouldn’t that pull things down? Wouldn’t that be part of the explanation?
ZB: Keep in mind that when we measure wage premiums, we’re always comparing people who went to college with people who only finished high school. So there are Black students on both sides of that comparison, across both lower- and higher-income groups.
That said, I think your point is well taken. We don’t do any work in the paper specifically looking at changes in the racial composition of students by parental income over this period. One thing we do show is that the test scores of lower-income students who go to college aren’t falling over time. But you’re probably right: while racial discrimination affects both college-goers and non-college-goers, it’s entirely plausible that part of what we’re picking up here is the changing racial dynamics in college-going.
AU: What’s the range of policy solutions we can imagine here, other than, you know, taking money away from rich publics and giving it to community colleges? That’s the obvious one to me, but maybe there are others.
ZB: And not just community colleges—satellite publics as well. I’ve spent the last five years of my life thinking about how to get more disadvantaged students into highly selective universities, and what happens when they get there. The main takeaway from that research is that it’s really hard to get lower-income students into highly selective universities. It’s also expensive, because of the financial aid required.
But once they get into those schools, they tend not only to benefit in terms of long-run wage outcomes, they actually derive disproportionate value. Highly selective schools are more valuable for lower-income kids than for the higher-income kids who typically enroll there.
What I’ve learned from this project, though, is that the closing of higher education’s mobility pipeline isn’t fundamentally about access. It’s about investments—by state governments, by students, by donors, by all the people and organizations that fund higher education. Over time, that funding has become increasingly centralized in schools that enroll a lot of wealthy students.
So, the point you brought up—redirecting funds—is important. In California they call it “rebenching”: siphoning money away from high-funded schools and pushing it toward low-funded schools. There’s very little academic research on what happens when you do that, but our study suggests that this century-long trend of unequal investment has disadvantaged low-income students. Potentially moving in the other direction could make a real difference for them.
AU: Zach, thanks so much for being with us today.
ZB: My pleasure.
AU: It just remains for me to thank our excellent producers, Tiffany MacLennan and Sam Pufek, and you, our listeners and readers, for joining us. If you have any questions or comments about today’s podcast, or suggestions for future editions, don’t hesitate to get in touch at [email protected].
Join us next week when our guest will be Dmitry Dubrovsky, a research scholar and lecturer at Charles University in Prague. He’ll be talking to us about the slow-motion collapse of Russian higher education under Vladimir Putin. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
Back in late 2023, a little known libertarian by the name of Javier Milei was elected President of Argentina with a strong mandate to conquer that country’s hyperinflation. His strategy for doing so was pretty straightforward — freeze public spending, which would mean a big loss in real terms until inflation came down, and then let the free market do the rest.
That was easier said than done. Milei lacked a majority in Congress and all of the legacy parties had some reason to try and preserve the status quo, but more or less, Milei got his way and the public sector, including public universities, have had to shrink enormously as a result. Falling budgets, cratering salaries, the lot.
But now the opposition is starting to gain strength. Over the northern summer, Congress passed a bill meant to roughly double state spending on public higher education. Last week, predictably Milei vetoed the law. We can probably expect a season of protests and strikes to ensue.
Returning to the show today to discuss all this is Marcelo Rabossi of the Universidad Torcuato Di Tella in Buenos Aires. He joined the podcast 18 months ago at the outset of Milei’s term to discuss what the President’s agenda was likely to have in store for the higher education sector. Today he’s with us to talk about how the system is surviving what amounts to a massive cut in real pesos, and what the next few months look like as tensions mount between the President and the opposition.
Of particular interest, I think, is where we talk about how, despite Milei’s affinity to the US hard right, he’s avoided Trumpian tactics, like targeted cutbacks through research rescissions and outright institutional extortion.
But enough from me. Let’s hear from Marcelo.
The World of Higher Education Podcast
Episode 4.3 | Crisis or Reform? Higher Education in Milei’s Argentina with Marcelo Rabossi
Alex Usher (AU): Marcelo, when we last spoke in January 2024, Javier Milei was newly elected president at the head of La Libertad Avanza. He didn’t have a majority in Congress—still doesn’t. He was elected on a mandate to stop hyperinflation, but his appeal wasn’t just about tighter money. He was a libertarian who wanted to shrink the size of government enormously, which is, in some ways, quite a revolutionary idea in Argentina. Generally speaking, how has his first year and a half in office gone? Is inflation down? Has the size of the government shrunk?
Marcelo Rabossi (MR): From the very beginning, even during his campaign, Milei promised radical changes to literally crash hyperinflation. He aimed to do this by reducing government spending and opening the economy. Inflation has dropped substantially. For example, in December 2023, monthly inflation peaked at 25% and now it’s around 2% for three consecutive months. This is largely due to Milei’s aggressive austerity measures and a very tight monetary policy. He significantly cut federal spending and restored market dynamics.
It’s also true that poverty has declined, from 54% in early 2024 to about 32% in early 2025. On the other hand, economic activity has stagnated, and retirees have lost much of the purchasing power of their pensions. That’s the dark side of Milei’s economic plan.
AU: How has he been able to achieve his agenda without a majority in Congress? What’s the dynamic there? Does he strike deals with conservative parties, or does the presidency give him some ability to rule by decree? How do you get things done when you’re a minority president?
MR: That’s a great question, because I think this is the first party in power with a minority in both chambers of Congress. Milei has relied on emergency executive decrees to bypass legislative opposition or blockages and to implement deep reforms.
Early on, he also struck strategic deals with conservative parties, particularly PRO—the party of former President Macri—and the Radical Civic Union. These strategies helped him pass the “Ley de Bases” in 2024, which was a foundational reform to deregulate the economy.
However, this approach had its limits. He’s now facing growing resistance, even from former allies. Internal divisions and shifting loyalties have made these alliances fragile.
By mid-2025, even some conservative legislators began distancing themselves from Milei’s more extreme measures and aggressive behavior. So I’d say he has governed through a mix of executive power, tactical alliances, and public pressure—but he’s losing that advantage.
AU: My understanding is that Milei’s approach to reducing expenditure and inflation has been simply to freeze spending on government departments. Inflation is lower now than it was two years ago, but it’s still reasonably high, so inflation just erodes the value of that spending.
How has this affected higher education? How big has the cut been to higher education in real terms—that is, after inflation? And is higher education different from other social sectors? Presumably you’d see the same dynamics with hospitals and other services. Is higher education being targeted for bigger reductions, or no?
MR: You’re absolutely right. Spending freezes across all public areas—education, health, infrastructure—have been his primary tool to fight inflation. But as you noted, when inflation remains high, even if it’s slowing, frozen budgets imply reductions in real terms.
Regarding higher education, let me give you some numbers. In 2024, funding for Argentina’s public universities fell by around 30% in real terms and by 2025, the projected university budget is about 35–36% lower than in 2023. According to my analysis, around 80% of higher education spending in Argentina goes to salaries, and those dropped by about 30–35%. Capital expenditures for infrastructure have also collapsed.
But it’s not only university funding. Overall, education has suffered a real decrease of more than 30% between 2023 and 2025. For example, teacher training and technology programs are down 40%, and early childhood education infrastructure is down 60%. Scholarships for low-income students have also decreased by about 40%. I should add that schools are funded at the provincial level, so national cuts didn’t have as large an impact there. But universities, which are funded nationally, were hit hard. Overall, higher education has been one of the hardest-hit sectors.
So, this “freeze strategy,” as I call it, has helped Milei achieve fiscal surpluses and reduce inflation—but it has come at the cost of shrinking real investment in the country’s future.
AU: The president is sometimes seen as Argentina’s Trump—that’s sort of his international reputation. He certainly has admirers on the U.S. far right. Elon Musk even copied him with the chainsaw routine, attacking public finances.
I don’t get the sense that Milei is a friend of higher education. He rants about “woke intellectuals” and that kind of thing, which lines up with the American right. But I don’t get the sense he’s copied Trump in terms of silencing particular lines of research or picking fights with individual universities.
So apart from the financial cuts, which can maybe be defended purely on anti-inflationary grounds, what has the relationship been between Milei and the higher education sector?
MR: Unlike Trump, Milei hasn’t gone after specific research areas or individual institutions. He hasn’t interfered with academic freedom—there have been no restrictions on curricula, no attacks on gender studies or climate research, and no attempt to control university governance.
His approach has been more structural than targeted at specific institutions. That said, the University of Buenos Aires—the largest and most important in the system—has been his main target, simply because it’s the most visible.
I should add that some of his early ideas, like replacing direct public funding of universities with vouchers, have remained more like theoretical provocations than serious proposals. They have no real support and no chance of being implemented.
So while Milei’s stance toward higher education is hostile, it’s not close to institutional repression. His obsession is with the economy and controlling inflation.
AU: A moment ago, you talked about roughly a 30% decline in real terms for university support—maybe a bit higher if you compare the end of 2025 to the end of 2023. How does a university deal with a cut of 33%? What kinds of decisions do they have to make to keep the doors open in conditions of austerity like that? And what have been the consequences of those decisions?
MR: First, universities reacted in order to survive. I would say they are operating in survival mode. In this scenario, universities have had to freeze salaries, delay infrastructure repairs, and cut back on research funding. They’ve also shortened semesters, reduced course offerings, and postponed new programs. Some campuses, like the University of Buenos Aires, have even merged departments or cut non-essential services.
To give you an idea of why these fiscal restrictions have hit so hard: between 80% and 90% of universities’ total income comes from national government funds. Remember, undergraduate education in Argentina is tuition-free, and undergraduates represent more than 90% of a total student body of over 2 million enrolled in national institutions. On the other hand, historically Argentina’s public universities haven’t had a strong tradition of fundraising. Some institutions are beginning to move in that direction, collecting money from private donors, but it’s still very limited.
AU: Surely those kinds of cutbacks would make private universities in Argentina more attractive, right? Argentina doesn’t have a huge private sector—it’s not like Chile or Brazil. I think about 80% of students are in the public system. But have private universities seen an opportunity here? Are they taking advantage of these cuts to tout the benefits of paying tuition and offering something more complete than the public sector?
MR: As I always say, in Argentina the private sector is more tolerated than stimulated, unlike in Brazil or Chile. There are about 60 private universities in the country with around 400,000 undergraduates. Historically, they’ve largely avoided political confrontations and remained neutral. Politics tends to play out in the public sector, so unlike national institutions, private universities haven’t been cast as ideological enemies or targets. This has allowed them to operate with less social and political confrontation.
On the financial side, the private sector largely depends on tuition fees—on average, 90% of their income comes from that source. So decreases in public funding haven’t been an issue for them, since they don’t rely on public subsidies or loans. Recently, however, there have been rumors about public scholarships for students at private universities.
Financially speaking, they’re in reasonably good shape. They’ve been able to maintain operations, salaries, and infrastructure. In a way, they look relatively resilient. And you’re right—while public universities are cutting programs, freezing salaries, and facing potential strikes, private universities now appear more stable and predictable for students and families. For those who can afford tuition, private institutions may seem like a real option.
AU: The public universities have obviously been fighting back over the past year and a half. I’ve lost count of the number of strikes, protests, and demonstrations of public opposition.
What’s interesting is that just in the past few months—during the Northern Hemisphere summer, your winter—Congress considered a bill to stabilize university finances. If I understand correctly, they mandated a funding floor tied to a certain percentage of GDP. That law passed about a month ago. What was this bill, and how did it pass? Because it seems to get back to the question of the president losing allies, since some of his conservative partners voted for it.
MR: Right. The goal of this law was to increase Argentina’s university budget from around 0.4% of GDP to 1.5% in the next five years. That’s a big jump. Beginning in 2026, funding will rise to 1% of GDP.
Historically, public spending on universities has been around 0.6% of GDP, peaking at 1% but usually closer to 0.8%. So this proposal represents a significant increase. It’s intended to replace the funding law passed by the government in 2024.
The bill was introduced in Congress by the rectors of Argentina’s 56 national universities, with support from unions and student organizations. It also proposes updating budget allocations for accumulated inflation in 2023–2024 and reinforcing faculty salaries starting in December 2023, with monthly updates tied to the consumer price index.
AU: Let’s talk about what happens politically here. Both houses of Congress passed the law, and Milei vetoed it on September 10th, I think. How does this get resolved at this point? What happens politically to the bill from here on in?
MR: You’re right about the veto—it’s his main political tool, given that he has no majority in either chamber. University unions, students, and education advocates have already staged protests and strikes, and more demonstrations are expected, especially around Congress.
The veto will escalate tensions between Milei and the education sector, and it’s becoming a rallying point for the opposition. In my view, the next few weeks will be critical. If Congress can’t override the veto, universities will remain under severe financial strain, and political pressure on Milei will intensify.
Either way, this is more than a budget fight. The opposition says it’s a battle over the future of public education in Argentina.
AU: President Milei has another two years and three months left in his mandate. What’s your best guess about higher education? How is it going to fare between now and then? What does the Argentinian system look like at the end of 2027?
MR: Yes, you’re right—we have two years ahead. It’s difficult to predict the future in Argentina, although some would say: expect a new crisis and you’ll probably be right.
As we’ve said, despite lacking a congressional majority, Milei has pushed through major reforms via executive decrees. That’s been his political tool. His confrontational style has kept him in the spotlight but also sparked resistance from traditional parties, the far left, conservatives, and even moderate liberals.
Whether this initial economic stabilization translates into long-term growth—and consequently, political support—remains the big question. If he wins in the next legislative elections this October, he will likely maintain his firm stance, continue vetoing, and I don’t see major changes. If the economy grows, there may be some money to calm the situation, but not enough to achieve what the vetoed law proposed: doubling university funding in relative terms in the short or medium term. That’s a kind of utopia, even if the country emerges from its depression.
But if Milei loses by a wide margin, the pressure will be enormous, creating a vicious circle that prevents Argentina from escaping economic stagnation. Keep in mind: the only way for universities to receive more funding is for the country to grow. If conflict increases, investors will postpone decisions, and in such a scenario, there are no winners.
Again, public universities in Argentina are more than just educational institutions—they are symbols of social mobility and national pride. Milei’s veto of the bill to increase university funding and staff salaries will likely trigger widespread outrage, uniting students, faculty, unions, and the political opposition. In fact, new public demonstrations are already underway and may continue for weeks, months, or even the next two years until his mandate ends.
AU: Lots to keep an eye on. Marcelo Rabossi, thank you so much for being with us today.
MR: It’s my pleasure. Thank you so much.
AU: And it just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you—our listeners and readers—for joining us once again. If you have any questions or comments about today’s episode, or suggestions for future ones, please don’t hesitate to write to us at [email protected].
Join us next week when our guest will be Yale University’s Zach Bleemer, professor of economics, who has just co-written a fascinating new paper, Changes in the College Mobility Pipeline since 1900. We’ll be talking about some of that report’s surprising findings. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
It’s been about eighteen months since this podcast last visited Australia. The story at the time was about something called “the Universities Accord”, an oddly-named expert panel report which was supposed to give the Labor government a roadmap for re-structuring a higher education system widely believed to be under enormous stress.
Since then, lots has happened. There’s been an international student visa controversy, a whole ton of cutbacks at institutions (including a quite wild polycrisis at Australian National Universities) and a general election which saw the Labor Party unexpectedly returned to power with an increased majority.
So, what’s on the agenda now? To answer that question, we called up long-time podcast friend Andrew Norton, currently Research Fellow at the Centre for Independent Studies, and Policy and Government Relations Adviser at the University of Melbourne, and as usual he’s here to give us the straight dope down under. Our discussion ranges pretty widely over developments in the last 18 months: to me the most interesting question is why the government has been so slow to move on key aspects of the Universities Accord. Andrew’s answer to that question is, I think, pretty revealing, and should resonate both in Canada and the UK – quite simply, left-wing governments aren’t as different from right-wing ones as you might think when it comes to delivering change in higher education.
But enough from me, let’s listen to Andrew.
The World of Higher Education Podcast
Episode 4.2 | Higher Ed at the Ballot Box: Australia’s Election and the Accord with Andrew Norton
Alex Usher: Andrew, welcome back. Last time we talked was about 18 months ago, and the Universities Accord report had just dropped. There were a whole bunch of recommendations about funding, job-ready graduates, access, system regulation, and even something odd about a national regional university. Labor had about a year and a half between the time the report came out and the election this past May. What did they do with that time? What aspects did they move on most quickly?
Andrew Norton: It was a bit of an odds-and-ends approach. The big, expensive changes to the way students and institutions are funded have really been postponed. But they’ve done a range of things.
They’ve introduced a national student ombudsman—the first national complaints organization for students. They’ve created a new system for funding people in preparatory courses. They’ve increased regulations on universities to support students who are struggling or at risk of failing.
Mostly, they’ve done things aimed at helping students, while the big structural work is still to come.
Alex Usher: So, they did the cheap stuff?
Andrew Norton: Essentially. They did the things that were cheap for the government but shifted costs onto the universities.
Alex Usher: And with the other elements, did they say no to any of them? Or did they just leave it quiet—maybe we’ll do it, maybe we won’t?
Andrew Norton: The thing they’re attracting the most criticism for is the Job-Ready Graduate student contribution. Back in 2021, the previous government radically redesigned how students pay for their education. The idea was to encourage people into courses the government wanted, like teaching or nursing, by discounting student fees, and to discourage others by raising fees in areas the government regarded as “not job-ready,” like humanities and social sciences.
The Accord’s final report said the system should change—go back to something closer to what we had before, where there’s a rough relationship between fees and likely future earnings. But the government has deferred this to the Australian Tertiary Education Commission (ATEC), which currently exists as a website but doesn’t yet have legislation. That legislation will probably come early next year.
So, the earliest possible date for changes is 2027, and quite possibly later. The government is getting a lot of criticism because, while fees were being increased, they said it was a bad thing and that they’d fix it. Yet first they sent it off to the Accord review, then to ATEC, and now who knows when it will actually happen.
Alex Usher: So, there’s a lot of kicking the can down the road at a time when institutions are having financial trouble?
Andrew Norton: That’s true. A lot of institutions are reducing staff and cutting courses. Exactly why varies—some are still struggling with international student numbers, some with domestic enrolment. But the key problem is that costs are rising faster than revenues.
They’ve signed wage deals that are well above inflation, while government grants are only indexed to inflation. So they’re in a situation where they have to control costs, and staff numbers and courses are one of the few levers they have left.
Alex Usher: You mentioned international students. One of the things we noticed here in Canada—because we went through the same thing a few months before you—was this whole notion of international student caps. The idea was similar: there was a perception, I’m not sure how true it was, that international students were affecting the housing market. Both Labor and the opposition supported caps; they just disagreed on how severe they should be. What actually happened on that front? Are there caps, and how are they regulated?
Andrew Norton: I think the answer is: sort of.
The background is that in the second half of 2023, the government started to believe that international student numbers were contributing to housing shortages and rising rents. Many in the sector agree there’s some truth to that. If you add up all the students, ex-students on temporary graduate visas, and people on bridging visas—often students waiting on another visa—you’re probably looking at around a million people in a population of about 27 million. It’s hard to argue that it has no impact on the housing market.
The government introduced a range of migration measures: making visas more expensive and making it harder to get a student visa in the first place. But this wasn’t really affecting Chinese students, who remain the largest single group in Australia. So in May last year, they introduced legislation that would have put formal caps on the number of students each university and education provider could take. Everyone thought this was certain to pass, since the opposition also supported caps.
But in a big surprise last November, the opposition changed course and didn’t support the bill. Combined with the Greens’ opposition, it couldn’t get through the Senate and didn’t become law.
Instead, the government recycled the caps idea at the “national planning” level. The main feature was that once an institution hit 80% of its allocated number, further visa applications would go into a “go-slow” lane. The implied threat was that if an institution went over in future, there could be penalties. But so far, that hasn’t happened.
So now we’re essentially back to a migration-driven set of restrictions on international numbers.
Alex Usher: Before we get to the election, there was an interesting article—I think it was in Times Higher—about the idea that universities had nobody in their corner going into the election, that they’d lost some of the social license they once had.
Part of it was about the very large vice-chancellors’ salary packages, which have been an issue for a long time—many presidents earning over a million dollars. But there have also been persistent stories about wage theft, with universities systematically underpaying employees. Then there are the narratives about “management gone mad” and cuts—particularly at the Australian National University.
Is it true? Are universities more friendless in Australia than they used to be? Or is there something different this time?
Andrew Norton: I think there is something different this time. It’s not just that there have been a lot of issues.
On wage theft—as the union calls it—this has mostly resulted from universities relying heavily on casual or sessional employees. Payroll systems are complex, with different rates for different activities. It is genuinely hard to get right, but it seems almost every university has failed to align payroll systems with how people are actually employed.
As a result, about half the institutions have had to repay staff or correct wages they didn’t pay the first time. Roughly half a dozen universities are now facing high-level enforcement by workplace authorities, putting them in the same category as traditional rogue employers like those in retail.
The optics are terrible: people on very low wages aren’t being paid correctly, while vice-chancellors are earning over a million dollars a year. That contrast doesn’t look good.
The real big change, though, is political. The Liberal Party opposition has long been skeptical of universities, but what shocked institutions was that the governing Labor Party took the Accord review and, if anything, has been even harsher with universities than the previous government.
That’s why universities are reeling. They expected that after the change of government in 2022, life would get easier. It certainly hasn’t.
Alex Usher: Let’s talk about the election. Your election was only about a week after ours in Canada, and it seemed like a very similar story: a weak center-left government on course to be crushed by a right-wing party. But then that right-wing party suddenly didn’t seem so cuddly once Trump had been in office for two or three months. I think the difference, though, is that higher education actually played some role in the Australian election. What promises did the different parties make?
Andrew Norton: That was quite unusual. Higher education usually isn’t an election issue in Australia. But this time Labor picked up on discontent over student debt in its first term.
The issue was that we index student debt to inflation. And like in many other countries, there was a post-COVID inflationary period. At one point, indexation was around 7% in a single year.
I think that triggered what I’d call a latent issue. Over the 2010s, there was a big increase in student numbers and, correspondingly, in debt. We ended up with about 3 million people holding student debt, totaling over 80 billion Australian dollars. That’s a very large constituency. Labor realized that while this hurt them in their first term, maybe they could turn it into a positive.
They did something similar to what’s been discussed in the U.S.—or in some cases done in the U.S.—which was to promise cutting all debts by 20%. They announced this in November last year. During the campaign they didn’t push it hard until the final week, when they really started to focus on it.
There was a late surge in support for the government, which gave them a very large majority. My theory is that the 20% cut—which was worth more than $5,000 to the average person with student debt—was enough to swing people over the line and deliver Labor its big win.
Alex Usher: What I found odd about this is that debt doesn’t actually affect your payments in Australia, because you’ve got one of the purest and original income-contingent systems in the world. Cutting debt by $5,000 only reduces the length of time you’ll be paying—for example, my debt is paid off in 2050 instead of 2055. I’m amazed that would move the needle so much, because next year what everybody pays is still a function of their income, not the size of their debt. So how did that work?
Andrew Norton: I think it’s because the debt issue had become so salient in people’s minds. The strange thing is that, at the same time, Labor also promised to change the repayment system in ways that would actually reduce how much people repay this year, under laws already operating now. But that got almost no airtime.
When journalists called me, I’d ask, “Do you want me to talk about this too?” And they’d say, “What’s that?” There was zero recognition. It just wasn’t being highlighted.
One reason might be that the repayment change isn’t straightforward. While the average person will repay less, everyone will now face a marginal repayment rate of 47%—that’s including income tax plus the 15% of income they have to repay once they’re over $67,000 Australian.
As this comes into operation, I think there could be political problems. But during the campaign, the overwhelming focus—99%—was simply on the debt cut.
Alex Usher: Let’s be clear about that, because it’s interesting. Australia has always had an income-contingent system where, if you were below a threshold, you paid nothing. But as soon as you went over that threshold, you paid a percentage of your total income, not just the marginal income above the threshold.
Andrew Norton: The change is that it’s now a marginal system. And the threshold for starting repayment has moved from $56,000 Australian to $67,000. So a whole lot of people are now out of the repayment system as a result.
But there’s a downside: more people will see their debt keep rising through indexation, because they’re not making repayments—or their repayments are smaller than the amount added by indexation. I think that’s going to be a problem.
Alex Usher: What’s the marginal rate above that?
Andrew Norton: It’s 15% above $67,000, and then it goes up to 17% at $125,000 a year. Those are high numbers. Once you set a high threshold, you’ve got to set high repayment rates to bring in a reasonable amount of revenue for the government.
Alex Usher: Now that Labor has been reelected, what do you think their agenda looks like for the next three years? Which parts of the Universities Accord that they passed on last year are they actually going to move on? You’ve mentioned the Job-Ready Graduate program and the regulator. Anything else?
Andrew Norton: One thing they’ve already done, consistent with some of their earlier moves, is new legislation on what they call gender-based violence. That’s going to be quite complex regulation for the sector to manage.
The big issue ahead is how they’ll distribute student places in the future. Their general mantra is “managed growth.” What they’re aiming for is a system with much more government control over the number of student places at each university, and likely also more control over which courses those places are allocated to.
At the moment, universities have a maximum grant, but aside from niche areas like medicine, there’s effectively no control over how those places are distributed internally. And even though universities eventually use up all their public funding, they can still enroll more students if they’re willing to accept only the student contribution. Some universities have been quite happy to do that.
Alex Usher: Similar to what we have in Ontario.
Andrew Norton: Exactly. The universities that are currently what we call “over-enrolled”—taking more students than they’re being fully funded for—are feeling vulnerable. Some of them will find this shift very difficult to manage.
Alex Usher: So, the government wants to control domestic student numbers through this mechanism, and they’re effectively going to do something similar for international students through a system of caps, perhaps. Are they going to move on caps again, and will it be in line with this whole notion of managed growth?
Andrew Norton: I think so, yes. The Australian Tertiary Education Commission has said it will regulate international student numbers in the future—at least in the university sector. Presumably there will be some coordination between the domestic and international totals.
In the past, there’s been discussion of saying international students should make up no more than a certain percentage of total enrollments. Some universities already do this voluntarily, so I wouldn’t be surprised if a maximum percentage is formally set.
Alex Usher: It’s interesting you mention growth, because we’ve just been talking about how difficult it is for universities to balance their budgets. If there’s no new money—either from domestic sources or international students—how are they going to grow? I just saw, I think it was today, that the University of Melbourne is giving up on building a second campus.
Andrew Norton: That’s partly due to problems with the particular site they had chosen.
To backtrack a little—when they say “managed growth,” that doesn’t necessarily mean actual growth. They used the same phrase for international students even when the goal was clearly to reduce numbers. So in that case, it was really managed degrowth rather than growth.
What they do want in the long run, as recommended in the Accord, is for a higher percentage of people—particularly from disadvantaged backgrounds—to acquire a university degree. That’s the growth they want to achieve.
The challenge is the student market. The school-leaver market, in my analysis, is probably recovering after being flatter than usual. Universities that rely on school leavers are likely the ones that have managed to over-enroll.
But the mature-age market is in a long slump, apart from a brief spike during COVID. I don’t think that market will fully recover, because many in that cohort have already earned their bachelor’s degrees at a younger age and aren’t returning in the same numbers as before.
Alex Usher: With all these restrictions—fewer international students, slumping domestic enrollments, and declining government funding—what do you think the system looks like five years from now? By 2030, is this a sector that’s found its mojo again, or are we looking at long-term decline?
Andrew Norton: I don’t think it’s as bad as it looks in some other countries, where demographics are worse than in Australia. But I do think the 2020s will continue to be a difficult period.
We’ve been talking about potential structural changes in the labor market and the impact of AI, which could devalue a degree. That could cause shocks in the system we haven’t yet seen.
Higher education has survived numerous ups and downs in the labor market over the decades. Usually, any drop-offs are short-term, and then growth returns. But maybe this time is different—I’m not sure. Right now, we’re not seeing huge effects of AI in either international or domestic enrollment numbers. But it’s definitely possible that, once we start seeing negative labor market signals—like new graduates struggling to find work—that could hit demand.
Alex Usher: Andrew, thanks for joining us on the show.
Andrew Norton: Thanks, Alex.
Alex Usher: And thanks as always to our excellent producers, Sam Pufek and Tiffany MacLennan, and to you—our listeners and readers—for joining us. If you have any questions or comments about today’s episode, or suggestions for future ones, please don’t hesitate to get in touch at [email protected].
Join us next week when Marcelo Rabossi from the Universidad Torcuato Di Tella returns to talk about new developments in Argentina’s university financial crisis, and the showdown between Congress and President Javier Milei over a new higher education law. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
Welcome back to our fourth season. Time Flies. We’ve gone back to an audio only format ’cause apparently y’all are audio and bibliophiles and not videophiles, so we decided to chuck the extra editing burden. Other than that, though, it’s the same show. Bring you stories on higher education from all around the world. So, let’s get to it.
Today’s guest is Pedro Teixeira. He’s a higher education scholar from the University of Porto in Portugal, focusing to a large extent on the economics of education, but he also just finished a term as that country’s Secretary of State for higher education. That’s a position closer to a junior minister rather than a deputy minister, but it has elements of both.
I first met Pedro about 20 years ago, and I ran into him again this summer in Boston at the Center for International Higher Education’s biannual shindig, where he was giving the Philip Altbach lecture. And let me tell you, this was the best lecture I have listened to in a long time.
Two reasons for this. First, Pedro spoke about his experiences as a Secretary of State trying to negotiate a new funding formula with universities in that country. I won’t spoil the details, but one big highlight for me was that he was in the rare position of being a politician, trying to convince universities not to have a performance-based element in their funding formula. And second, he talked about the future of higher education in the face of possible falling returns to education due to wider adoption of artificial intelligence.
It was such a good talk, I knew my World of Higher Education podcast listeners would think it was great too. And while I couldn’t record it, I did do the next best thing. I invited Pedro to be our lead off guest for this season’s podcast. Let’s listen to what he has to say.
The World of Higher Education Podcast
Episode 4.1 | From Funding Formulas to AI: Pedro Teixeira on Higher Education’s Next Challenges
Alex Usher: Okay, so Pedro, you were an academic at CIPES (Centre of Research on Higher Education Policy) at the University of Porto, and you went from that to being a minister of state. That’s not an unfamiliar path in Portuguese higher education—Alberto Amal, I think, did something similar. But that move from academia to government, how big a shift was that? What did you learn, and what were you not expecting when becoming a minister of state?
Pedro Teixeira: I think you’re right in the sense that there are quite a few people who have done this, not only in Portugal but also in other parts of Europe, in different areas. And I think it’s always a bit of a challenge, because there’s this expectation that, since you’re an academic—and especially if you’re an expert on the topic—people expect you to have a solution for all the problems. And it’s not exactly like that.
At the same time, I think one is worried that what you do in office will be coherent with what you had advocated as an academic and with what you had written about specific topics. That’s challenging.
In some respects, I wasn’t very surprised by what I faced, because I had been involved in advisory roles and I knew people who had been in that kind of policy role. So I think I wasn’t—I mean, there were the things you expect, like the amount of work and the long days. But I never felt that was really the most difficult part. Of course, going through these things and living them is a little different than knowing them in the abstract.
But I think the main concern for me was the permanent pressures. You are always concerned with something, always worried either about the problems you have to deal with or the problems that will emerge.
What I was not so happy with was the lack of a sense of urgency in some of the actors, both on the government side and on the side of stakeholders in the sector. Because if you feel the problems are significant, you need to move forward—of course not rushing, but you do need to move forward.
On the positive side, I think the quality and dedication of staff was very important. Civil service is often criticized, but I found that very important. And the other thing that was also very important was the role of data and evidence, while at the same time you also need to develop arguments and persuade people about the points you’re trying to make.
Alex Usher: So what were those urgent issues? I know one of the big things you dealt with was a funding formula—and we’ll come to that later—but what, to your mind, were the other big urgent issues in Portuguese higher education at that time?
Pedro Teixeira: As we know, most people in their higher education system always think their system is very specific, very different from everyone else. But in fact, we know there are a lot of commonalities across education sectors.
In many ways, the challenges were the same ones that people describe as belonging to mass systems, or what others might call mature systems. One significant issue, of course, was the adverse demographic trends.
Another was the tension between, on the one hand, wanting to broaden access and enhance equity in the system, and on the other, facing enormous pressures toward stratification and elitism, with the system tending to reproduce socioeconomic inequalities.
There were also issues related to diversity versus isomorphism. On the one hand, people agree that in order for a mass system to function, it needs to be diverse. But there are pressures in the system that tend to push institutions toward mimicking or emulating the more prestigious ones.
The balance between missions is another challenge. This relates to that issue of isomorphism, because research has become so dominant in defining what higher education institutions do and how they see their mission.
And, of course, there were issues of cost and relevance: who should pay for higher education, and how can we persuade society to put more resources into a sector that, because it is a mass system, is already absorbing a significant amount of public funding?
Alex Usher: All right. On that point about demographics, I saw a story in one of the Portuguese newspapers this week saying that applications were down 15% this year. Is that a rapidly evolving situation? That seems like a lot.
Pedro Teixeira: No. There’s been a downward trend over the last three or four years, but because the number of applicants was bigger than the number of places, it didn’t disturb things much. Most of what we’re seeing now is actually due to the fact that in 2020, with the pandemic, exams for the conclusion of secondary education were suspended.
They were only reintroduced this year. That decision was taken at the end—actually by the government I was part of—at the beginning of 2023. But in order to give students and schools time to adjust, the change only applied to the students who were starting secondary education then. Those are the students who applied this year for higher education.
Basically, when you look at the data—we don’t yet have the numbers on how many graduated from secondary education—but the number of applicants is very much in line with what we had in 2019, which was the last year we had exams for the conclusion of secondary education.
And in fact, if you take into account the declining trend of the last three or four years, I would say it’s not a bad result. It actually means the system managed to compensate for those losses.
Alex Usher: Managed to absorb.
Pedro Teixeira: Yeah, yeah. But it’s also a signal for the sector in that respect.
Alex Usher: So let’s go back to the funding formula issue, because I know that was a big part of your tenure as Secretary of State for Higher Education. What was wrong with the old formula, and what did you hope to achieve with a new one?
Pedro Teixeira: There are two things. I think there were some issues with the old formula. It was designed in 2006, so 15 years had passed. The sector was very different by then—the situation, the challenges, everything had changed.
Also, like many formulas of that time, it was quite complicated, with many indicators and many categories for fields of study. That didn’t make the system very transparent. If you introduce too many indicators and variables, in many ways the message you want to convey is lost. A funding formula is supposed to be an instrument to steer the system.
But the larger problem was that this old formula hadn’t been applied for the last 12 years. When the Great Recession started around 2005–2010, the government suspended its application. Since then, the budgets of all institutions have evolved in the same way—same amount, same direction—regardless of their number of students or their performance.
So when we came into government in 2022, the situation was, in many cases, very unbalanced. Some institutions that had grown significantly didn’t have funding to match that growth. Others that had declined hadn’t seen any adjustments either.
The idea of having a new formula was preceded by an OECD review commissioned by the previous government, which we took over. Our idea was to design a simpler and more transparent formula that would form part of the funding system. In addition to the formula, we introduced funding contracts, focused mainly on institutions located in more peripheral regions of the country.
The idea was also to have a four-year period of gradual implementation of the new model and funding system. At the same time, this would correct some of the imbalances caused by not having applied any formula for 12 years.
Alex Usher: And how did institutions respond to those proposals? Were they on your side? Were there things they liked, and things they didn’t like? Universities don’t like change, after all.
Pedro Teixeira: On the other hand, I think a significant part of the sector was very keen to finally have some kind of formula—some set of rules that would be applied to the whole sector. Of course, some institutions were afraid that by reintroducing a formula, given their recent evolution, they might end up on the losing side.
But one of the key aspects of the process was that this was always seen as a formula, or a new system, that would be introduced within a pattern of growth in funding for the sector—not as a way of redistributing funds from some institutions to others. That made the process easier. It would have been much more difficult if we had been taking money from some institutions to give to others.
This required political commitment from the government, and it was very important to have the backing of the Prime Minister and the Minister of Finance. That meant we could correct imbalances without creating disruption for institutions.
I would say the main critical points were, first, the differentiation between sectors. We have a diverse education system with universities and vocational institutions. Then there was the question of whether to differentiate between regions. Our decision was to have a formula that applied in the same way to all regions, and then use funding contracts as additional resources targeted for strategic purposes—mainly for institutions located in more deprived or less populated regions.
Another point raised in discussions was fields of study. Everyone wants their own fields—or the ones in which they are strongest—to be better funded. But we really wanted to simplify the mechanism, and I think that helped.
Finally, there was the issue of performance indicators. We didn’t propose to introduce them from the start. Because we had gone so many years without a formula, we didn’t have consistent data, and moreover we wanted performance indicators to be developed collaboratively with institutions. The idea was that institutions themselves would decide which areas they wanted to focus on, which areas they wanted to contribute to, and therefore which indicators they wanted to be assessed by.
Because we decided that performance indicators would come in a second step, some institutions wanted them introduced earlier. That was also a point of discussion.
Alex Usher: I find that fascinating, because I don’t think I’ve ever heard of universities—maybe “demanding” is the wrong word—but being disappointed that there wasn’t enough performance-based funding in a system. Why do you think that was?
Pedro Teixeira: I’m not sure I was surprised, but it was significant that some institutions were pressing for it. In some ways, it could have been a strategic approach by certain institutions because they thought they would be on the winning side.
But I think it also has to do with the fact that this competitive, performance ethos has so deeply permeated higher education. At some point, I even said to some institutions: be careful what you wish for. Because in some cases, this could curtail your autonomy and increase the possibility of government interference in your ability to devise your own strategy.
Actually, I think that was, in many ways, the only real public criticism that came up. And that was quite interesting, to say the least.
Alex Usher: I want to shift the ground a little bit from Portugal to Boston. Two months ago, you gave the Philip B. Altbach Lecture at Boston College’s Center for International Higher Education. You devoted a lot of your talk to artificial intelligence and how it’s likely to change higher education. Could you tell us a little bit about your views on this?
Pedro Teixeira: That’s a fascinating topic. Of course, it’s an important issue for many people around the world and for many education institutions.
It’s fascinating because, to a certain extent, we’ve been nurtured by a view that has dominated over the last decades—that progress has been skill-biased. In previous waves of technological progress, the labor market tended to favor those with higher skills. Education was often seen as contributing to that, helping people be on the winning side, and the returns to more education and more skills seemed to confirm it.
My concern is that this wave may be slightly different. I’m not saying it will destroy a lot of jobs, but I am concerned that it may affect skilled and experienced workers in ways that previous waves did not.
We’ve already seen, and many of us have already experienced in our own jobs, that AI is performing certain tasks we no longer have to do. It’s also changing the way we perform other tasks, because it works as a collaborative tool.
So I think there is a serious possibility that AI—especially generative AI—will change the tasks associated with many jobs that today require a higher education degree. We need to pay attention to that and respond to it.
I worry that because education has been such a success story over the last half-century in many countries, there is a degree of complacency. People take a relaxed attitude, saying: “We’ve seen previous changes, and we didn’t experience so many problems, so we’ll be fine this time as well.”
I think there are quite a few aspects we need to change in our approach.
Alex Usher: And what might those areas be? Because I have to say, whenever I hear people discussing AI and radical change in the labor market, I think: that’s the stuff that’s actually hardest for higher education to deal with—or for any kind of education to deal with.
Education is often about teaching a corpus of knowledge, and there is no corpus of knowledge about AI. We’re all flailing blindly here—it’s totally new.
I think a lot about James Bessen and his book Learning by Doing. He was talking about how education worked during the Industrial Revolution in Manchester, and in other parts of England that were industrializing. Basically, when there’s a totally new technology, who are you going to get to teach new people? There’s no settled corpus of knowledge about it.
What do you think higher education institutions should be doing in that context?
Pedro Teixeira: One of the major concerns I have is that we tend to focus so much on the impact of digitalization and technology on science and technology fields. But we should be much more attentive to how it’s changing non-technical fields—health professions, the humanities, and the social sciences. These make up a very large part of higher education, and a very large part of the qualified workforce in many of our countries.
I think there are several things we need to do. The first is to rethink the balance between the different missions of higher education. At the moment, so much of the pressure and so many of the rewards are focused on missions other than education, teaching, and learning. We need to rebalance that. If institutions don’t commit themselves to education, it will be much more difficult for anything significant to happen at the basic level—among professors, programs, and so on.
If AI does affect more experienced workers, that means many people will need more support in terms of lifelong learning. They will need support in reskilling, and in some cases, in changing their professional trajectories. This is an area where many higher education institutions preach much more than they practice.
So I think we need to rethink how we allocate our efforts in education portfolios, moving more attention toward lifelong learning. So far, the focus has been overwhelmingly on initial training, which has been the core of the sector in many systems.
Finally, we would need to rethink—or at least introduce—changes at the level of initial training: the way we teach, the way we assess students, the way we train and retrain academic staff. None of this will be obvious. But in the end, it will all come down to how much institutions are committed to education as the prime mission of higher education.
Alex Usher: So even if AI is not a mass job killer—either now or in the future—we are seeing declining rates of return on higher education around the world. There’s massive graduate unemployment in China, quite a bit in India, and in the United States, for the first time, young graduates are less likely to be employed than non-graduates of the same age.
What does it mean for the higher education sector globally if rates of return decline? Are we heading for a smaller global higher education sector?
Pedro Teixeira: I tend to be cautious with some of these conclusions. We may be extracting too much from what could be transitional situations. We’ve seen in the past moments where there were problems adjusting supply and demand for graduates, and those didn’t necessarily lead to a permanent or structural situation where education became less relevant.
In countries like China and India, higher education systems have expanded tremendously in recent years. In some ways, what we’re seeing now is similar to what other countries experienced when they went through massive expansions and the economy couldn’t absorb the rising number of graduates as quickly as the education system was producing them.
It’s also not surprising that in many countries we’re seeing lower relevance of initial training—bachelor’s or first-cycle degrees. That’s a supply-and-demand issue. As systems move from elite to mass, that’s normal. But in many cases, we’ve seen a growing premium for postgraduate degrees and for continuing education. So I’d be cautious about concluding that education will become less and less relevant.
That said, I would repeat my concern about complacency. I don’t necessarily expect a decline in the sector, but perhaps a slower pattern of growth. That will be a challenge, because we’re coming out of decades of relentless growth in many education systems.
I also think we’ll see a broader scope in how we approach education and differences in higher education portfolios. It’s not that there aren’t many things we can do, but it will probably require us to rethink what we expect from professors and where institutions should focus their attention.
Alex Usher: Right. Pedro, thank you so much for being with us today.
Pedro Teixeira: My pleasure.
Alex Usher: And it just remains for me to thank our excellent producers, Sam Pufek and Tiffany MacLennan, and you, our listeners and readers, for joining us. If you have any questions or comments about today’s episode, or suggestions for future episodes, don’t hesitate to get in touch with us at [email protected].
Join us next week when our guest will be the University of Melbourne’s Andrew Norton. He’ll be talking about what lies ahead for Australian higher education under a second Labor government. Bye for now.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
“Guiding Through Change: How Small Colleges Are Responding to New Realities”: A Live Conversation with Three Small College Presidents
August 2, 2025, by Dean Hoke: Over the past several months, higher education has experienced an unprecedented wave of transformation. The elimination or curtailment of Diversity, Equity, and Inclusion (DEI) initiatives, shifting federal financial aid policies, declining enrollment in traditional undergraduate programs, and heightened visa scrutiny and geopolitical tensions pose potential risks to international student enrollment, an area of growing importance for many small colleges.
Dr. Chet Haskell, in a recent piece for the Edu Alliance Journal, captured the mood succinctly: “The headlines are full of uncertainty for American higher education. ‘Crisis’ is a common descriptor. Federal investigations of major institutions are underway. Severe cuts to university research funding have been announced. The elimination of the Department of Education is moving ahead. Revisions to accreditation processes are being floated. Reductions in student support for educational grants and loans are now law. International students are being restricted. These uncertainties and pressures affect all higher education, not just targeted elite institutions. In particular, they are likely to exacerbate the fragility of smaller, independent non-profit institutions already under enormous stress.”
Small colleges—often mission-driven, community-centered, and tuition-dependent—are feeling these disruptions acutely.
As we enter the third season of Small College America, a podcast series that spotlights the powerful impact of small colleges across the nation, my co-host Kent Barnds and I wanted to mark the moment with something special. Rather than recording a typical podcast episode, we’re hosting a live webinar to engage in a timely and candid discussion with three dynamic presidents of small colleges.
Join us for a special Small College America webinar:
“Guiding Through Change: How Small Colleges Are Responding to New Realities”
Wednesday, August 27, 1:00 PM – 2:00 PM Eastern
Our panelists bring deep experience, insight, and a strong commitment to the mission of small colleges:
This one-hour webinar will explore how small private colleges are navigating today’s evolving environment and planning strategically for the future.
Who Should Attend:
There is no charge to attend—secure your spot today!
We hope you’ll join us for this thoughtful and timely conversation.
Hello everyone, and welcome to the World of Higher Education podcast. I’m Tiffany MacLennan, and if you’re a faithful listener, you know what it means when I’m the one opening the episode—this week, our guest is AU.
We’re doing a year in review, looking at some of the global higher education stories that stood out in 2024—from massification to private higher education, from Trump’s international impact to the most interesting stories overall. But I’ll pass it over to Alex.
The World of Higher Education Podcast
Episode 3.35 | The Year the Money Ran Out: Global Higher Ed Review
Tiffany MacLennan (TM): Alex, you’re usually the one asking the questions, but today you’re in our hot seat.
Alex Usher (AU): It’s technically the same seat I’m always in.
TM: Fair point. But today, you’re in the question seat. Let’s start with the global elephant in the room.
Last week, we talked at length with Brendan Cantwell about the domestic effects of Donald Trump’s education policies. But what impacts are we seeing internationally? Are any countries or institutions actively trying to capitalize on the chaos in the U.S.? And if so, how serious are those efforts to poach talent and build their reputations?
AU: There are lots of countries that think they’re in a position to capitalize on it—but almost none of them are serious.
The question is: where is the real destruction happening in the United States? Where is the greatest danger? And the answer is in research funding. NIH funding is going to be down by a third next year. NSF funding is going to be down by more than 50%. So it’s the scientists working in STEM and health—those with the best labs in the world—who are suddenly without money to run programs.
But what are they supposed to do? Are there alternatives to labs of that scale? Are there alternatives to the perks of being a top STEM or health researcher at an American university?
Places like Ireland—well, Ireland has no research culture to speak of. The idea that Ireland is going to step in and be competitive? Or the Czech Republic? Or India, which keeps talking about this being their moment? Come on. Be serious. That’s not what’s happening here.
There might be an exodus—but it’s more likely to be to industry than to other countries. It’s not clear to me that there will be a global redistribution of this talent.
Now, the one group that might move abroad? Social scientists and humanities scholars. And you’ve already seen that happening—especially here in Toronto. The University of Toronto has picked up three or four high-profile American scholars just in the last little while.
Why? Because you don’t need to build them labs. The American lead in research came from the enormous amounts of money spent on infrastructure: research hospitals, labs—facilities that were world-class, even in unlikely places. Birmingham, Alabama, for example, has 25 square blocks of cutting-edge health research infrastructure. How? Because America spent money on research like no one else.
But they’re not doing that anymore. So I think a lot of that scientific talent just… disappears. It’s lost to academia, and it’s not coming back. And over the long term, that’s a real problem for the global economy.
TM: Sticking with the American theme, are there other countries that have been taking, well, I hesitate to say lessons, but have been adopting policies inspired by the U.S. since Donald Trump came to power? Or has it gone the other way—more like a cautionary tale of what not to do if you want to strengthen your education sector?
AU: I think the arrival of MAGA really made a lot of people around the world realize that, actually, having talented researchers in charge of things isn’t such a bad idea.
We saw that reflected in elections—in Canada, in Australia—where center-left governments that were thought to be in trouble suddenly pulled off wins. Same thing in Romania.
The one exception seems to be Poland. But even there, I’m not sure the culture war side of things was ever as intense as it was in the United States. In fact, the U.S. isn’t even the originator of a lot of this stuff—it’s Hungary. Viktor Orbán’s government is the model. The Project 2025 crew in the U.S. has made it pretty clear: they want American universities to look more like Hungarian ones.
And the Hungarian Minister of Higher Education has been holding press conferences around the world, claiming that everyone’s looking at Hungary as a model.
So, there’s definitely been a shift—America is moving closer to the Hungarian approach. But I don’t think anyone else is following them. Even in Poland, where there’s been political change, the opposition still controls the parliament, so it’s not clear anything dramatic will happen there either.
So no—I don’t think we’re seeing widespread imitation of U.S. education policy right now. Doesn’t mean it couldn’t happen—but we’re not there yet.
TM: One thing we’ve seen a lot of this year is talk—and action—around the massification of higher education. What countries do you think have made some of the most interesting moves in expanding access? And on the flip side, are there any countries that are hitting their capacity?
AU: Everyone who’s making progress is also hitting their capacity. That’s the key thing. Massification isn’t just a matter of saying, “Hey, let’s build a new school here or there.” Usually, you’re playing catch-up with demand.
The really interesting case for me is Uzbekistan. Over the past decade, the number of students has increased fivefold—going from about 200,000 to over a million. I’m not sure any country in the world has moved that fast before. That growth is driven by a booming population, rising wealth, and—crucially—a government that’s willing to try a wide range of strategies: working with domestic public institutions, domestic private institutions, international partners—whatever works. It’s very much a “throw spaghetti at the wall and see what sticks” approach.
Dubai is another case. It’s up 30% this year, largely driven by international students. That’s a different kind of massification, but still significant.
Then there’s Africa, where we’re seeing a lot of countries running into capacity issues. They’ve promised access to education, but they’re struggling to deliver. Nigeria is a standout—it opened 200 new universities this year. Egypt is another big one. And we’re starting to see it in Kenya, Tanzania, Ghana—places that have reached the level of economic development where demand for higher education takes off.
But here’s the catch: it’s not always clear that universal access is a good idea from a public policy standpoint. At certain stages of economic development, you can support 70% participation rates. At others, you’re doing well to sustain 20%. It really depends where you are.
And these are often countries with weak tax systems—low public revenue. So how do you fund it all? That’s a major challenge.
What we’re seeing in many places is governments making big promises around massification—and now struggling to keep them. I think that tension—between rising demand and limited capacity—is going to be a major story in higher education for at least the next three or four years.
TM: I think that leads nicely into my next question: what’s the role of private higher education in all of this?
Private institutions have been popping up more and more, and the conversation around them has only grown. Sometimes they’re filling important gaps, and sometimes they’re creating problems. But this year, we also saw some pretty major regulatory moves—governments trying to reassert control over what’s become a booming sector.
Do you see this as part of a broader shift? And what do you think it means for the future of private higher education?
AU: I don’t see a big shift in private education in less industrialized countries. What you’re seeing there is more a case of the public sector being exhausted—it simply can’t keep up with demand. So private providers show up to fill the gap.
The question is whether governments are regulating those providers in a way that ensures they contribute meaningfully to the economy, or if they’re just allowing bottom-feeders to flourish. And a lot of places struggle to get that balance right.
That said, there are some positive examples. Malaysia, for instance, has done a pretty good job over the years of managing its private higher education sector. It’s a model that other countries could learn from.
But I think the really interesting development is the growth of private higher education in Europe.
Look at Spain—tuition is relatively cheap, yet 25% of the system is now private. France has free tuition, but still, 25% of its system is private. In Germany, where tuition is also free, the private share is approaching 20%.
It’s a different kind of issue. Strong public systems can ossify—they stop adapting, stop responding to new needs. In Europe, there’s very little pressure on public universities to align with labor market demand. And rising labor costs can mean that public universities can’t actually serve as many students as they’d like.
France is a good example. It’s one of the few countries in Europe where student numbers are still growing significantly. But the government isn’t giving public universities more money to serve those students. So students leave—they say, “This isn’t a quality education,” and they go elsewhere. Often, that means going to private institutions.
We had a guest on the show at one point who offered a really interesting perspective on what private higher education can bring to the table. And I think that’s the fascinating part: you’d expect the private sector boom to be happening in a place like the U.S., with its freewheeling market. But it’s not. The big story right now is in Europe.
TM: Are there any countries that are doing private higher education particularly well right now? What would you say is the “good” private higher ed story of the year?
AU: That’s a tough one, because these things take years to really play out. But I’d say France and Germany might be success stories. They’ve managed to keep their top-tier public institutions intact while still allowing space for experimentation in the private sector.
There are probably some good stories in Asia that we just don’t know enough about yet. And there are always reliable examples—like Tecnológico de Monterrey in Mexico, which I think is one of the most innovative institutions in the Americas.
But I wouldn’t say there’s anything dramatically different about this year that marks a turning point. That said, I do think we need to start paying more attention to the private sector in a way we haven’t since the explosion of private higher education in Eastern Europe after the fall of the Berlin Wall.
Back then, governments looked around and said, “Okay, we need to do something.” Their public universities—especially in the social sciences—were completely discredited after decades of Marxist orthodoxy. So they let the private sector grow rapidly, and then had to figure out how to rein it in over time.
Some countries managed that fairly well. Romania and Poland, for instance, have built reasonably strong systems for regulating private higher education—though not without some painful moments. Romania in particular had some pretty chaotic years. If you look up Spiru Haret University, you’ll get a sense of just how bad it can get when you completely let the market rip.
But now there are decent examples that other regions—especially Africa and Central Asia—can look to. These are areas where private education is going to be increasingly important in absorbing new demand.
The real question is: how do you translate those lessons from one context to another?
TM: Alex, when it comes to the least good stories of the year, it felt like the headlines were all the same: there’s no money. Budget cuts. Doom and gloom.
What crisis stood out to you the most this year, and what made it different from what we’ve seen in other countries?
AU: Well, I think Argentina probably tops the list. Since President Milei came into power, universities have seen their purchasing power drop by about 60%. It’s a huge hit.
When Milei took office, inflation was already high, and his plan to fix it was to cut public spending—across the board. That meant universities had to absorb the remaining inflation, with no additional support to help cushion the blow. And on top of that, Milei sees universities as hotbeds of communism, so there’s no political will to help.
It’s been brutal. So that’s probably the number one crisis just in terms of scale.
Kenya is another big one. The country has been really ambitious about expanding access—opening new universities and growing the system. But they haven’t followed through with adequate funding. The idea was that students would pick up some of the slack financially, but it turns out most Kenyan families just aren’t wealthy enough to make that work.
They tried to fill the gap with student loans, but the system couldn’t support it. And now there’s blame being placed on the funding formula. But the issue isn’t the formula—it’s the total amount of money being put into the system.
There’s a common confusion: some people understand that a funding formula is about dividing money between institutions. Others mistakenly think it dictates how much money the government gives in total. Kenya’s leadership seems to have conflated the two—and that’s a real problem.
Then you’ve got developed countries. In the UK, there have been lots of program closures. France has institutions running deficits. Canada has had its fair share of issues, and even in the U.S., problems were mounting before Trump came back into the picture.
We’ve almost forgotten the extent to which international students were propping things up. They helped institutions on the way up, and they’re now accelerating the downturn. That’s been a global issue.
And I know people are tired of hearing me say this, but here’s the core issue: around the world, we’ve built higher education systems that are bigger and more generous than anyone actually wants to pay for—whether through taxes or tuition.
So yeah, we’ve created some great systems. But nobody wants to fund them. And that’s the underlying story. It shows up in different ways depending on the country, but it’s the same problem everywhere.
TM: Do you think we’re heading into an era of global higher ed austerity, or are there some places that are bucking the trend?
AU: It depends on what you mean by “austerity.”
Take Nigeria or Egypt, for example—the issue there isn’t that they’re spending less on higher education. The issue is that demand is growing so fast that public universities simply can’t keep up. You see similar dynamics in much of the Middle East, across Africa, to some extent in Brazil, and in Central Asia. It’s not about cuts—it’s about the gap between what’s needed and what’s possible.
Then you have a different set of challenges in places with more mature systems—places that already have high participation rates. There, the problem is maintaining funding levels while demographics start to decline. That’s the situation in Japan, Korea, Taiwan, and parts of Europe. The question becomes: can you sustain your system when there are fewer students?
And then there’s a third category—countries that are still growing, but where governments just don’t want to spend more on higher education. That’s Canada, the United States, and the UK. Those systems aren’t necessarily shrinking, but they’re certainly under strain because of political choices.
But keep in mind—those are also among the richest countries in the world, with some of the best-funded universities to begin with.
In a way, what’s happening internationally mirrors what we saw in Canada with the province of Alberta. For many years, Alberta had post-secondary funding that was 40 to 50% above the national average. Then it started to come down toward the mean.
I think that’s what we’re seeing globally now. Countries like the UK, U.S., and Canada—whose systems were well above the OECD average in terms of funding—are being pulled back toward that average.
To us, it might feel like austerity. But if you’re in a country like Greece or Lithuania, and you look at how much money is still in the Canadian or UK system, you’d probably say, “I wish I had your problems.”
So I’d say we’re seeing three different dynamics at play—not a single, uniform trend.
TM: One of the most fun things about working at HESA is that we get to read cool stories for a good chunk of the time. What was the coolest or most unexpected higher education story you came across this year?
AU: I think my favorite was the story out of Vietnam National University’s business school. Someone there clearly read one of those studies claiming that taller people make more successful business leaders—you know, that there’s a correlation between CEO pay and height or something like that.
Same idea applies to politicians, right? Taller politicians tend to beat shorter ones. Canada, incidentally, has a lot of short politicians right now. Anyway, I digress.
At VNU in Hanoi, someone apparently took that research seriously enough that they instituted a minimum height requirement for admission to the business school. That was easily my favorite ridiculous higher ed story of the year—just completely ludicrous.
There were others, too. Just the other day I saw a job posting at a university in China where credential inflation has gotten so bad that the director of the canteen position required a doctorate. That one stood out. And yet, people say there’s no unemployment problem in China…
Now, in terms of more serious or long-term developments, one story that really caught my attention is about Cintana. They’re using an Arizona State University–approved curriculum and opening franchises across Asia. They’ve had some real success recently in Pakistan and Central Asia, and they’re now moving into South Asia as well.
If that model takes off, it could significantly shape how countries in those regions expand access to higher education. That’s definitely one to watch.
And of course, there’s the gradual integration of AI into universities—which is having all sorts of different effects. Those aren’t headline-grabbing curiosities like the Vietnam height requirement, but they’re the developments we’ll still be talking about in a few years.
TM: That leads perfectly into my last question for you. What’s one trend or change we should be watching in the 2025–26 academic year? One globally, and one locally?
AU: Globally, it’s always going to come back to the fact that nobody wants to pay for higher education. That’s the obvious answer.
And I don’t mean that people in theory don’t want to support higher ed. It’s just that the actual amount required to run higher education systems at their current scale and quality is more than governments or individuals are willing to pay—through taxes or tuition.
So I think in much of the Northern Hemisphere, you’re going to see governments asking: How do we make higher education cheaper? How do we make it leaner? How do we make it less staff-intensive? Not everyone’s going to like those conversations, but that’s going to be the dominant trend in many places.
Not everywhere—Germany’s finances are still okay—but broadly, we’re heading into a global recession. Trump’s policies are playing a role in triggering that downturn. So even in countries where governments are willing to support higher education, they may not be able to.
That means we’re going to see more cuts across the board. And for countries like Kenya and Nigeria—where demand continues to grow but capacity can’t keep up—it’s not going to get any easier.
Unfortunately, a lot of the conversation next year will be about how to make ends meet.
And then there’s what I call the “Moneyball” question in American science. U.S. science—particularly through agencies like NIH and NSF—has been the motor of global innovation. And with the huge cuts now underway, the whole world—not just the U.S.—stands to lose.
In Moneyball, there’s that moment where Brad Pitt’s character says, “You keep saying we’re trying to replace Isringhausen. We can’t replace Isringhausen. But maybe we can recreate him statistically in the aggregate.”
That’s the mindset we need. If all the stuff that was going to be done through NIH and NSF can’t happen anymore, we need to ask: How can we recreate that collective innovation engine in the abstract? Across Horizon Europe, Canada’s granting councils, the Australian Research Council, Japan—everyone. How do we come together and keep global science moving?
That, I think, could be the most interesting story of the year—if people have the imagination to make it happen.
TM: Alex, thanks for joining us today.
AU: Thanks—I like being on this side. So much less work on this side of the microphone. Appreciate it.
TM: And that’s it from us. Thank you to our co-producer, Sam Pufek, to Alex Usher, our host, and to you, our listeners, for joining us week after week. Next year, we won’t be back with video, but we will be in your inboxes and podcast feeds every week. Over the summer, feel free to reach out with topic ideas at [email protected]—and we’ll see you in September.
*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service. Please note, the views and opinions expressed in each episode are those of the individual contributors, and do not necessarily reflect those of the podcast host and team, or our sponsors.
This episode is sponsored by KnowMeQ. ArchieCPL is the first AI-enabled tool that massively streamlines credit for prior learning evaluation. Toronto based KnowMeQ makes ethical AI tools that boost and bottom line, achieving new efficiencies in higher ed and workforce upskilling.